RegTech in Northern Ireland

Sector and market opportunity

The mounting complexity of regulatory compliance has provided the push for a rapidly growing RegTech sector, which has emerged as one of the fastest advancing areas of financial technology. NI has one of the fastest-growing tech sectors in the UK with a vibrant, well-connected RegTech ecosystem.

There are opportunities to connect and collaborate with a strong cluster of companies active in compliance and regulatory technology and services. Innovative start-ups are delivering solutions from the region on a global basis, and international investors include major financial institutions and world-class cyber security leaders. Investment into the greater use of RegTech could save the UK’s top 5 banks over £500 million annually in compliance costs; with a clear demand for more innovative companies to service this.

Growth prospects

The global RegTech market size is expected to grow from $5.46 billion in 2019 to $28.33 billion by 2027, with spending on RegTech estimated to make up more than 50% of global compliance budgets by 2026. Attracting more global RegTech vendors during early funding stages will boost innovation and enhance NI’s global market competitiveness.

Location

As part of the UK, NI operates within its globally respected and robust regulatory framework, whilst at the same time experiences easier access to the European and Irish financial services markets due to its location on the Island of Ireland. Capitalising on its unique position within the UK and Europe, NI-based teams are developing and delivering compliance solutions to meet a range of international regulations.

Belfast, has been identified as a top 3 FinTech location of the future and has been ranked one of the top 10 European Tech Cities of the Future by the Financial Times, fDi Intelligence.

Connectivity

NI’s excellent transport and communications infrastructure allows companies to do business easily with their customer bases around the world. There are 3 international airports in NI. Belfast International Airport is well connected to both Europe and the rest of the UK. Flight times from NI locations to London are less than 90 minutes.

NI’s railway system connects Belfast with NI main city areas and Dublin, a major financial services sector, with rail travel taking under 2 hours from Belfast to Dublin. NI’s excellent road network means the region is well connected with 5 key transport corridors with all areas of Northern Ireland within 2 hours.

With an impressive 93% of premises in NI equipped for full fibre connection, it stands as the top UK location for fibre connectivity, surpassing the national average of 55%. Recognising the importance of advanced wireless connectivity, partners plan to invest £30 million in Belfast to support research, foster business innovation, and create new city services through advanced wireless networking.

Local talent and skills

The workforce in NI is highly skilled, innovative and results driven, with one of Europe’s youngest and fastest growing populations, with 50% under the age of 40. The country is home to 2 world-class universities with 82% of graduates achieving a first class or upper second-class degree. Nearly 70,000 full and part-time students are enrolled in higher education, creating a steady stream of educated and adaptable young people.

There are 46,000 employed in the financial and related professional services sector in NI. Around one third of these are employed by major financial services companies that maintain delivery centres in the region including Axa Insurance, Allstate, Citi, CME Group, FD Technologies, Lloyds Banking Group and TP ICAP.

Research and expertise

NI is home to 2 outstanding universities, Queen’s University Belfast, and Ulster University, both of which are recognised for their world-class research facilities, student experience, and graduate employment.

Queens University Belfast (QUB) has a strong track record and impact on financial regulation research. It houses the Centre for Secure Information Technologies (CSIT), one of the UK’s leading innovation and knowledge centres for cyber security. To date, CSIT has worked on significant research programmes including SAFEcrypto worth €3.8 million. This was the first major Horizon 2020 project to be co-ordinated in NI which investigated practical postquantum cryptographic solutions. The university has also recently established the Cyber-AI Hub to bring together academia and businesses to increase NI’s cyber capacity.

Ulster University has a strong track record in successful commercialisation of research and has also established several research centres in related areas. This includes the Cognitive Analytics Research Lab, the Artificial Intelligence Research Centre and the Legal Innovation Centre.

Local and national government support

Invest NI supports investors to establish and expand successful operations in NI. From initial fact-finding, bespoke discovery visits, property and talent sourcing, business and sector network introductions through to tailored packages of financial assistance, Invest NI’s team of investment professionals will be there every step of the way.

The Windsor Framework announced in March 2023 is a post-Brexit legal agreement between the European Union and the United Kingdom.

NI is now the only place in the world from which businesses can move goods to both the UK and the European Union free from customs declarations, rules of origin certificates and non-tariff barriers. NI will continue to reap the benefits of new UK free trade agreements, such as the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trading bloc, as well as the UK regulatory scheme for trade in services.

The Department for Business and Trade (DBT) and local partners are here to support you in navigating the opportunities across the UK – to find the right fit for your business. For investors interested in considering high value options further – we provide a bespoke service tailored to your needs from investment inception, right through to aftercare support.

Success stories

FinTrU

Working closely with Global Investment Banks, FinTrU designs technology-enabled solutions to help them meet their regulatory obligations. The company employs over 1,300 people across Belfast, Derry/Londonderry, Dublin, Letterkenny, London, Maastricht, New York, and Porto.

Using a blend of local talent, technology and its TrUDelivery methodology, FinTrU’s market leading compliance services business supports clients across the financial crime, monitoring, surveillance, and regulatory compliance domains. FinTrU Compliance offers clients a range of services, including project and BAU solutions as well as valued industry insights and benchmarking, through their Model Office Advisory team.

First Derivative

First Derivative has been engaged in large-scale regulatory compliance programs of work for over 12 years providing a market leading anomaly detection and behavioural analytics platform. This utilises specialised high volume real-time and historical analytics technology to deliver solutions for market abuse, fraud, AML and transactions monitoring.

The system is dynamic, allowing constant evolution through machine learning which reduces false positives and adapts to new behavioural patterns. First Derivative have also implemented many other systems across a wide range of Reg Tech solutions from transaction reporting to sanctions screening.

Datactics Ltd

Datactics provides software and professional services to our financial services clients worldwide. Ranked in Gartner’s Data Quality Magic Quadrant they assist Chief Data Officers and data governance staff to identify and fix broken data. This improved information is then used value-adding business functions like regulatory reporting (for example BCBS 239) and predictive analytics. Datactics has 100+ clients worldwide including a number of Tier 1 investment banks, insurers and major UK government departments.