RegTech is most usefully applied to heavily regulated industries and activities such as financial services, gaming, healthcare, pharmaceutical, energy and aviation.
[1] RegTech to date has been focused on the digitization of manual reporting and compliance processes in the financial services industry, for example in the context of know your customer requirements, and is often mis-attributed as a subset of FinTech.
Furthermore, the massive increases in the volume and types of data that have to be reported to regulatory authorities represent a major opportunity for the automation of compliance and monitoring processes.
For the financial services industry, the application of technology to regulation and compliance was viewed as potentially increasing efficiency and the economy of scope and scale of incumbents.
[16] A study on United States–based financial advisers suggests that government-induced adoption of regtech increased market concentration linked to heightened acquisition activity and labor flows of high-quality workers to firms with better technology.