Regtech’s Rise in Fighting Financial Crime
Financial crime, including money laundering, sanctions evasion, and fraud, is growing in both scale and sophistication. Yet behind the scenes, a quieter transformation is taking place. Regtech solutions are now identifying illicit activity faster. They are more accurate using automation and real-time analytics. These technologies are reshaping compliance functions across the financial sector.
This shift is no longer hypothetical. It is grounded in real case studies and performance data. Compliance teams were once buried in spreadsheets and reactive processes. Now, they operate with intelligent systems. These systems screen, flag, and prioritise threats in real time. Regtech is redefining financial crime prevention at every level, from small fintech startups to global banks.
From Manual Burden to Automated Control
Consider a mid-sized digital bank that previously relied on daily batch screening, siloed datasets, and manual alert validation. Compliance officers spent much of their time dealing with high volumes of false positives. Onboarding delays stretched into multiple days, and suspicious transaction reports were often filed long after the activity occurred.
By 2025, this scenario has changed. Banks now deploy platforms that analyse sanctions data, PEP and adverse media inputs, and transaction behavior continuously. Alerts are generated based on dynamic risk models and integrated into decision-making workflows. These solutions improve operational efficiency and reduce exposure to regulatory fines and reputational risk.
The transformation is measurable.
Before and After: Holvi’s Regtech Overhaul
Holvi, a Finnish neobank, faced challenges in meeting EU anti-money laundering obligations. The bank relied on manual review of client profiles. It also used static rules. This approach caused inefficiencies and exposed compliance teams to risk.
Before:
- Compliance time per alert was high due to manual investigations
- Customer onboarding was delayed by verification bottlenecks
- Alert fatigue impacted analyst performance and prioritisation
After: Holvi implemented ComplyAdvantage’s API-driven compliance tools. The platform automated onboarding, sanctions checks, and customer screening. False positives were reduced by half. Alerts were generated only when risk profiles changed. Screening that once took hours now happens in seconds. Compliance teams redirected their time toward actual risk management rather than administrative processing.
Earthport’s Data-Driven Compliance Upgrade
Earthport, a cross-border payments platform, had similar struggles. The firm processed high transaction volumes without a real-time monitoring system. Legacy tools created inefficiencies and left blind spots in global risk coverage.
Before:
- High numbers of untailored alerts overwhelmed staff
- Batch processing created reporting delays
- Little flexibility to respond to evolving risks or client segments
After: Earthport moved to a rule-based, real-time transaction monitoring system using ComplyAdvantage data. Alerting was tied to client risk profiles. Reporting became instant. Investigators gained more control over how cases were escalated. Quality improved, while time spent on low-priority alerts decreased.
Santander and OakNorth: Results at Scale
Larger institutions are seeing similar gains. Santander UK adopted automated onboarding tools and deeper data integration. The result was a drop in average onboarding time from 12 days to just 2 days.
OakNorth Bank reported a false-positive rate of 2.3% among new applicants and 4.1% across its overall client base. This allowed compliance staff to focus their efforts on high-risk scenarios without being buried in irrelevant alerts.
Other firms achieved even sharper improvements:
- IPT Africa cut false positives by 60%
- Robocash reduced alert handling time by 50%
- Ebury sped up internal resolution time and decreased friction across departments
Why These Numbers Matter
False positives have long been a burden for compliance operations. In legacy systems, alerts could be triggered on up to 20% of customer transactions. Most of these alerts posed no real threat. In modern regtech deployments, this figure has dropped to 1% to 5%. For banks, that means less wasted time and fewer operational costs.
This also improves the speed and accuracy of suspicious activity reports. Financial crime investigations that previously took days or weeks can now be resolved within hours, sometimes minutes.
Strategic Shifts in Technology and Regulation
Regtech is no longer viewed as a back-office fix. It has become a strategic lever. These platforms deliver scalable, auditable, and transparent controls. They help financial institutions respond to fast-changing regulations without needing to rebuild infrastructure.
Verafin, the regtech firm acquired by Nasdaq in 2021, is now a cornerstone of its financial crime division. In Q2 2024, Verafin posted 25% growth in recurring revenue. The demand rose from banks seeking more effective ways to meet AML and fraud mandates.
Before and After Summary
| Institution | Before Regtech | After Regtech |
|---|---|---|
| Holvi | Manual risk reviews and onboarding delays | Automated screening and reduced false positives |
| Earthport | Static rules and batch processing | Real-time alerts and client-specific models |
| Santander UK | 12-day onboarding process | Onboarding time cut to 2 days |
| OakNorth Bank | High false-positive rate | Rates under 3%, sharper focus on real risk |
| IPT Africa, Robocash | High workloads and slow alert handling | 50–60% improvement in speed and accuracy |
Conclusion
The results speak for themselves. Regtech is no longer a speculative investment or a regulatory checkbox. It is a measurable competitive advantage. Banks are cutting costs, speeding up onboarding, and reducing exposure to criminal activity by deploying smart compliance tools.
Regulators are following closely. The UK’s Financial Conduct Authority is investing in analytics to police misconduct and improve oversight. The US IRS has recovered billions in fraud-related assets since shifting to tech-driven investigations.
Financial crime will continue to evolve, but the institutions tasked with stopping it are no longer stuck in outdated systems. With proven solutions already in place, RegTech is not just helping banks keep up. It is helping them lead.
