Regulatory Tech

Dear Clients and Friends,

Marlin & Associates (M&A) is pleased to share our latest report on the Regulatory Technology (RegTech) sector.

As we approach a year in the Covid-19 environment, the urgency for finding and implementing technology-based solutions to the governance, regulatory and compliance industry pain points has never been higher. The regulators have not and are not relaxing. Meanwhile, this pandemic has exposed critical gaps to many companies –and, by extension, to investors and acquirers.

In our debut report, in June, we highlighted some of the drivers of interest in RegTech m&a including shifting regulations and international regulatory divergence, new technologies, such as AI / Machine Learning, Natural Language Processing, Big Data, Advanced Analytics, Blockchain and Cloud Computing; and the desire to avoid costly penalties and headline risk. We noted that U.S. Banks alone have paid out more than$200bn in fines since 2008.

Our report this month expands in those themes, noting the continued global investment in cybersecurity and AI-based solutions as well as the increased demand for acquisitions, right through the worst of the pandemic. While the number of RegTech transactions in 2020 was fewer than we saw at the height of the market in 2019, as you will see in the report that follows, interest by buyers and investors in the sector remains strong; so does risk sensitivity. Good deals continue to be done, but they are taking more time. We expect this heightened sensitivity to continue well into 2021 until the pandemic is clearly behind us. At the same time, we expect to continue to see strong interest at strong values for strong companies.

We remain available to answer questions.

Kind regards,

Max