5 Startups Rebooting Regulation

  • Grace Noto
  • April 24, 2017
  • 1

Fintech has another cousin.

The rise of insurtech is running parallel to the rise of regtech, as financial firms and startups apply artificial intelligence, blockchain, and other technologies to the dizzying world of financial regulation.

Changing the face of regulation for a fresher, more transparent take isn’t exactly easy–as the OCC is finding out–but we at Bank Innovation think some startups are doing an admirable job.

Take a look at Bank Innovation’s list of five regtechs to watch below:



Protecting against fraud is one of the most costly areas of compliance, which is where regtechs like Onfido come in.

Started back in 2012 in San Francisco, Onfido provides identity verification services to its clients in order to help onboard customers with less fuss and less fraud. The regtech uses machine learning technology to authenticate the identity of those onboarding, reducing the risk of fraud and the rate of dropoffs, while streamlining the overall process.

Currently, the company’s service is in use by about 1,000 clients around the world.


If there’s anything 2016 taught us about fintech, it’s that everything in the future is going to be blockchain–every last one of the things. This means we should probably get around to regulating cryptocurrency, the original product designed for blockchain.

Say hi to Elliptic. Launched in 2015, the firm monitors for illegal activity on the chain before providing that data to financial institutions and law enforcement agencies. Defining regulation for bitcoin and the rest of the cryptocurrency brood (ether, zcoin, etc.) is difficult for largely two reasons: one, because no one has decided that those actually are currencies. And two, even if they are, bitcoin is not backed by a central government, making the retroactive regulatory forays by any central government into the way the currency acts slightly murky.

However, applying a technical fix to this issue, while also providing a way for law agencies to observe what happens on the chain, is a good first step.


The startup provides identity authentication services by using advanced analytics of traditional as well as alternative identifiers–government data, social login providers, etc.–in order to verify whether a user identity is real or fraudulent.

This security is applied to fraud and compliance systems across the globe, helping to lower compliance costs. The battle-tested online verification company was founded in 2011, and is now active in more than 60 countries, with its software being used by approximately 4 million people.


Preventing another financial crisis has been one of the most pressing missions of regulation since–well, arguably since the dawn of finance, but certainly since the last financial crisis in 2008.

It’s also the top goal of regtech startup Suade, which aims to circumvent the next crisis by creating solutions specific to regulation. Founded in 2014 in London, Suade provides software to FIs that enables banks to “achieve continuous compliance, manage their costs and easily conduct analysis.” The company is essentially building an open platform for financial regulation.


Machine learning might have a unique place in financial regulation, given its remarkable ability to quantify and clear reams of complex data that humans just, well, can’t.

That’s the point behind regtech startup Neurensic–the name is a shortening of “neural forensics”–which utilizes machine learning and AI technology to discern tampering or manipulation of financial markets. The Chicago-based SaaS company was founded in 2015, and raised a $1.78 million round of angel funding in February 2017.


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