I am a React.js and Ruby on Rails developer with over 4 years of experience delivering Fintech and eLearning solutions. I have a great passion for technology and a profound understanding of user-centered business. I always find solutions using the best, Agile-orientated practices.

Piotr Motak

\[TOC\]

Businesses lose millions to inefficient internal and external software architecture, making cost-effective software development crucial. Are you a startup owner or CEO looking to leverage new custom software to enhance your business? If so, you must know about Return On Investment (ROI).

ROI calculations are the bedrock of any custom software project. Determining the value of an investment is crucial for CTOs and business executives seeking clarity on the profitability of new software solutions. It’s difficult to make accurate business decisions without this metric, especially if you want to attract investors or stakeholders and boost overall cash flow.

Calculating the value of an investment on a custom software project for your business requires in-depth knowledge of the ROI formula and how to interpret this data. Selleo offers access to several [high-performance software development teams](https://selleo.com/software-development-team) alongside vital information regarding total costs and investment returns. In this article, we’ll walk you through measuring the ROI of a custom software project and how agile development can increase overall profit.

<ReadMore> Read also: [10 Financial Apps That Can Inspire Your Startup](https://selleo.com/blog/10-financial-apps-that-can-inspire-your-startup) </ReadMore>

## How do software development companies make profit?

Software development companies generate profit in three main ways. How they do so relies on factors such as the type of company and intended target audience. Each method also impacts the average ROI and overall costs going into a project, so it’s good to know the basics:

* **Trading:** Software development enterprises specializing in FinTech can use access to valuable data and computer power to make cost-effective investments in the stock market.
* **Hiring:** The most common and mutually advantageous way for software companies to make money through projects is via hiring. Passionate software developers benefit from full-time employment while clients get top-tier software solutions. At [Selleo](https://selleo.com/how-we-work), we are keen to reduce employee turnover to create the best and most consistent service for clients.
* **Consulting:** Software development companies often hire consultants to oversee specific processes within the business. This can cut costs as employees bill per hours needed to complete a project rather than having a full-time salary. It also means the development team can concentrate solely on creating the best and most-efficient software possible, resulting in a higher ROI.

![Img](https://a.storyblok.com/f/86602/870x495/793dca7489/what-is-return-on-investment.jpg)

## What is Return on Investment (ROI)?

ROI stands for Return On Investment. This is an objective calculation of how much value a business derives from its initial investment. The ultimate goal is to avoid a negative ROI by developing software that generates more revenue than it costs to implement it.

The gain of investment is the net profit a business will gain from implementing a custom software project. This is easy to perceive for retail companies, where gains are typically seen via increased sales. For other businesses, the gain of investment may also be tied to more efficient processes or fewer losses.

The cost of investment is the initial value of the new software system plus any further costs associated with its implementation. These can include licensing fees, tech support, and also the time-associated costs of teaching new software to employees.

<Baner name={fintech} />

## How software type influences how you measure ROI

How you calculate ROI depends on the software type. Consider some of the factors below to achieve an accurate ROI measurement. We’ve focussed on the two main software types: business process software and SaaS.

* **Business Process Software:** These custom software projects are designed to enhance internal business processes and optimize workflow. The ROI calculation must factor in the overall cost of implementation, maintenance, and any staff training. Its success is measured by several factors. These can include the time saved on a more efficient system, increased sales or business opportunities, less costly problems, and more.
* **SaaS:** Measuring the ROI of SaaS (software as a service) companies relies on slightly different factors. A significant consideration is how long the [SaaS company](https://selleo.com/saas-development-company) has been trading, as businesses in their infancy require higher costs to get the show off the ground. In these cases, the annualized ROI is measured via revenue generated by subscriptions to the software service. For example, a tech company developing advanced project management software would measure subscription profits against the cost of software development, implementation, and search for clients.

![Img](https://a.storyblok.com/f/86602/870x485/23612a976f/key-things-to-consider.jpg)

## Key things to consider when calculating the ROI of app and software development

An ROI calculation is ultimately **objective**, but the parameters involved can change depending on the nature of the software development project at hand. Businesses always have their own specific processes and challenges. Identifying these is crucial to determining an accurate ROI. To begin with, ask yourself the following questions:

* *Why is new software needed?*
* *What is it trying to solve?*
* *How long will it take to implement?*
* *Will you need long-running support?*
* *Will day-to-day processes be affected?*
* *Who will use the software?*
* *Will you need new hardware or cloud services?*
* *Will you need to train your employees?*

An accurate grasp of the above will help quantify the costs involved with a custom software project. Businesses must take this seriously to avoid a skewed ROI. The key costs to consider when measuring of ROI of a custom software project include:

* **Hardware Costs:** Relevant costs must be incorporated if the new software requires updated hardware.
* **Implementation Costs:** Software implementation can be costly for several reasons. Businesses will need to consider data migration, obstructed data processes, and a mass switch to the new system.
* **Training Costs:** New software commonly comes with training costs. Any potential profits derived from the new system will be lost without adequate teaching.
* **Support Costs:** Generally, ongoing software maintenance and support costs are around 20% of the initial development cost. This affects yearly net income, so it’s essential to factor into average ROI calculations.

<ReadMore> Read also: [How To Build A Financial Application: The Development ABC](https://selleo.com/blog/how-to-build-a-financial-application) </ReadMore>

## How to determine ROI of your custom software product?

Businesses will be ready to measure the ROI of their custom software project after careful consideration of the factors in the last two sections. The equation below outlines the basic calculation:

*ROI = (Gain of Investment) / (Cost of Investment) x 100%*

Observe the following steps to activate this formula:

1. Consider **all the costs** associated with the custom software project to calculate the cost of investment. These will include hardware, implementation, maintenance, training, and support costs. Remember to include annual operational costs and any net income losses incurred from software implementation.
2. Calculate the overall **savings and profit** a custom software project can achieve. This is harder to do, especially at the beginning. Most businesses use estimates if there isn’t yet any concrete evidence available. Consider whether the new software has generated higher efficiency, less costly errors, more sales, and other types of profit or savings.
3. Use the formula once you have the **Gain of Investment** and **Cost of Investment** to calculate the ROI of your custom software project. Here is an example:

450,000 / 300,000 x 100% = 150% ROI

## How Agile development can increase your ROI?

![Img](https://a.storyblok.com/f/86602/870x495/9225573331/how-agile-development-can-increase-your-roi.jpg)

Leveraging agile software development may significantly increase your ROI for numerous reasons. At Selleo, we use [agile development processes](https://selleo.com/blog/agile-software-development-process-everything-you-need-to-know) to increase our overall productivity, efficiency, and client satisfaction rates. Agile and scrum-based software development allows for greater flexibility and optimal resource usage.

The major benefits of agile software development include:

* More feedback cycles, ultimately generating better and more tailor-made software.
* Less wasted time and resources, decreasing the overall cost of investment.
* A flexible framework optimizes workload and unforeseen problem solutions.
* Superior customer satisfaction due to a coordinated and symbiotic relationship between the developer and client.

<Baner name={software-development} />

## How does outsourcing development impact ROI?

[Outsourcing software development](https://selleo.com/blog/outsourcing-software-development-to-poland-101) can achieve higher ROI due to a refined and ultimately more skilled development process. Outsourcing allows passionate software development teams, such as our own at [Selleo](https://selleo.com/software-development-team), to approach a custom software project with complete focus. In-house teams may be distracted by other pertinent issues in your business, stretching completion dates and increasing costs.

Consequently, outsourcing development can significantly enhance your ROI. Software development companies are at the forefront of technological evolution, so your product will be more dynamic and resilient as a result. Looking to outsource? Check out your options at Selleo, a [trusted partner](https://selleo.com/portfolio) to 230+ tech leaders in software development.

## Summary

Calculating the ROI of a custom software project is crucial for businesses looking to revamp their preexisting software framework. It’s impossible to accurately calculate software investment returns without doing so, which can lead to problems down the line with investors and stakeholders.

Selleo is keen to teach you the basics of measuring **ROI** in custom software projects. Measuring the cost of investment against the gain of investment is the main thing to remember. Consider costs such as implementation, maintenance, training, and hardware versus potentially profitable areas like increased efficiency, sales, and customer satisfaction.

Maximizing the ROI of a custom software project relies on multiple factors. As an outsourcing partner, Selleo can help you design efficient and streamlined software architecture to take your business to the next level. [Get in touch](https://selleo.com/contact) to see how we can help!

Do you want to measure the ROI of a custom software project? In this article, we’ll walk you through it.

How To Measure The ROI Of A Custom Software Project

\[TOC\]

Financial technology is in increasingly high demand nowadays. Global revenue from the fintech industry is forecasted to hit [€188 billion by 2024](https://www.statista.com/statistics/1214244/global-fintech-revenue/), and entrepreneurs are desperate to get in on the action.

Mobile app development is a particularly fertile fintech niche to invest in. However, you need a clear and structured idea of the development process and what you want to achieve. Having your own app can significantly enhance profits and general consumer awareness, but it can easily go wrong.

Keep reading for a comprehensive overview of how to build a successful financial application. Once you understand the basics, our [experienced Fintech software development team](https://selleo.com/software-development-team/fintech) is on hand to convert your dreams into reality.

![Img](https://a.storyblok.com/f/86602/870x565/cfc54be49c/what-is-fintech.jpg)

## What is fintech?

Fintech is an industry term referring to the development of new technological solutions to advance financial services. A portmanteau of financial technology, fintech essentially deals with the application of advanced technology to the banking and finance sectors. This can range from personal finance applications for mobile banking to crypto investment platforms.

Fintech is quickly gaining importance across countless areas. For example, innovative mobile banking apps make it easier for individuals to track spending and budget effectively. On a more complex level, machine learning and artificial intelligence may be used to deliver more accurate investment predictions or streamline mass payment processing.

Fintech companies are generally startups aiming to leverage new technology to make it easier for businesses or individuals to utilize financial services. Mobile app development is a common way to do so. Applications usually revolve around:

* Online Banking
* Peer-to-Peer Payments
* Crowdfunding
* Investment
* Mobile Payments
* Finance Management
* Crypto Wallets & Trading

<Baner name={software-development} />

## What is a fintech app?

Fintech apps are mobile applications that help businesses or individuals manage their finances and investments via numerous essential features.

PayPal is arguably the most popular fintech app, allowing individuals to easily make online purchases or send and receive money without using traditional online banking. Monzo is another example. The app-based digital banking provider enables easy access to day-to-day financial services without going through traditional banking institutions.

This new breed of fintech app is quickly gaining traction among consumers and investors due to advanced features, slick user interfaces, and lower transaction fees. Building a successful finance app will revolutionize your business model, providing more efficient financial solutions in a dynamic and modern mobile software package.

We’ll outline the benefits, features, and types of fintech app in the sections below:

### Benefits of a fintech app

![Img](https://a.storyblok.com/f/86602/870x382/f47cd96187/benefits.jpg)

Fintech apps benefit consumers and businesses in various ways.

Deviating from the old-fashioned financial services model reaps handsome rewards no matter where you are on the B2C or B2B spectrum. Customers get an overwhelmingly better service, while businesses enjoy high profitability and more efficient working processes.

A few of the key benefits of a fintech app include:

* **Practicality**: PayPal is a classic example of how important practicality is in the fintech sector. It revolutionized online payments with an extremely slick approach to banking, rapidly gaining a massive worldwide user base. Successful fintech apps offer more intuitive and user-friendly interfaces, ultimately making it far easier to manage personal finances. Consumers can access basic features at the press of a button, negating the clunky interfaces of outdated banking apps.
* **Cost-Effectiveness**: Fintech apps drive down costs for consumers and businesses by leveraging new artificial intelligence and machine learning technologies. These platforms generally offer low or sometimes non-existent transaction fees for various services, from investing to digital payments. It leads to more money being saved overall and a happy client base.
* **Customer Satisfaction:** Selleo knows the importance of [customer satisfaction](https://selleo.com/blog/how-to-improve-customer-satisfaction-using-technology), which explains our passion for using new technology to aid consumer happiness. Fintech apps enable users to access financial services easier, quicker, and at less cost. As a result, businesses can make their customers happier and more loyal, achieving higher ROI and brand longevity.
* **Pace Setting:** Fintech companies with talented mobile developers under their wing can set the pace via market-leading fintech apps and technology. If your business can offer cutting-edge and advanced features in an attractive app package, it is bound to be a success. Not only this but fintech businesses with world-leading mobile apps (think Monzo or PayPal) will naturally have an edge over competitors in the future.
* **Brand Reach:** A successful state-of-the-art app will elevate your business with higher profits, but perhaps even more importantly, it will offer unrivalled brand reach. All the most renowned fintech apps have grown through slick branding and word-of-mouth awareness. Once your company has a fashionable mobile app, its name will be ever-present in the fintech world.

<Baner name={fintech} />

### Example features of fintech apps

Knowing the expected fintech app features is paramount to continuously setting [software development trends](https://selleo.com/blog/mobile-software-development-trends-to-know-in-2022) within the industry. Making it easy for consumers to manage their finances is the primary goal. This is achieved via numerous features, including:

* Quick and easy money transfers
* Budget setting
* Financial advice and help
* Credit score tracking
* Automatic transfers into savings
* Spending trackers and alerts
* Straightforward investment tools

### Types of fintech app

![Img](https://a.storyblok.com/f/86602/870x565/08ce954cbe/types-of-fintech-app.jpg)

There is a broad spectrum of fintech apps on the market currently. Knowing the different categories is essential to identifying your specific niche or gap in the market, so check out the options below:

* Budgeting apps ([Mint](https://mint.intuit.com/), [Every Dollar](https://www.everydollar.com/app/sign-in))
* Investment and trading apps ([eToro](https://www.etoro.com/), [Dodl](https://www.dodl.co.uk/))
* Money lending apps ([Earnin](https://www.earnin.com/), [Dave](https://dave.com/))
* Instant money transfer apps ([PayPal](https://www.paypal.com/), [Monzo](https://monzo.com/))
* Credit score apps ([Experian](https://www.experian.co.uk/), [Credit Karma](https://www.creditkarma.co.uk/))

## Challenges of developing a fintech app & costs

Businesses must navigate various challenges to build a financial app successfully. Costs can be high, so acquiring enough capital via investors and stakeholders is crucial, especially for startups. Some of the most pressing challenges involved in developing a market-leading fintech app include:

* **Regulations**: Complying with government regulations is the No. 1 challenge for mobile fintech providers. Your whole business could be under threat, so navigating the complex network of laws and regulations in each territory you offer services is essential.
* **Interface:** Developing a slick and aesthetically pleasing user interface is another important challenge to overcome. The app needs to be dynamic and user-friendly with a straightforward approach to its core features. Detailed testing and feedback sessions will enhance this.
* **Unique Selling Point:** Standing out in an increasingly saturated fintech industry is difficult, so your app must have a compelling USP marking it out from the competition. Dedicated market research, forward-thinking software design, and natural creativity are essential here.
* **Funding:** While they can be extremely profitable long term, fintech startups generally need external investment to get their apps off the ground. Determining your expected ROI and working with efficient mobile developers is key to budgeting and acquiring funds.
* **Security:** Fintech companies handle sensitive personal data, so mobile apps must have watertight security protocols. This includes customer legal agreements, data privacy policies, insurance programs, and an unhackable backend.

## How to develop a fintech app

Developing a fintech app involves several important stages. You will need a clear idea backed by extensive market research alongside [market-leading mobile developers](https://selleo.com/software-development-team/fintech) like our own at Selleo. We’ll walk you through the process below:

### #1: Map Out An Idea

![Img](https://a.storyblok.com/f/86602/870x565/41ad21780c/map-out-an-idea.jpg)

Having a golden idea for a fintech app is key to being successful. Engage in targeted market research and extensive conceptualization sessions. Think creatively and factor in scalability, global reach, and user-trends into your decision-making. Most importantly, create a USP setting you apart from the crowd.

### #2: Decide On Functionality

What will your fintech app do? And how will it help consumers as much as possible? Making decisions on functionality is key to generating an early idea of how your app will work. It will also influence marketing decisions further down the line and general brand identity.

### #3: Choose The Right Tools & Platform

Choosing the right tools and platform is essential whether you work with an outsourced partner or an in-house development team. Decide between iOS and Android (or opt for both), and choose the most tailored tech stack for your project based on its scope, app architecture, programming languages, and thread detection technologies.

### #4: Sketch Out An Interface

Your fintech app’s front end is profoundly important, so make sure you take time sketching out ideas. This is the most creative part of the process, and you can have fun designing an innovative and eye-catching layout. Just don’t lose sight of the common objectives like easy access to basic features and uncluttered composition.

<ReadMore> Read also: [10 Financial Apps That Can Inspire Your Startup](https://selleo.com/blog/10-financial-apps-that-can-inspire-your-startup) </ReadMore>

### #5: Create A Mock-Up

Once you have decided on an interface and sketched out the basics, you’ll need to create a realistic mock-up of each screen of your financial app. This will determine whether your ideas translate into reality and help you visualize navigating through the app as a user.

### #6: Develop Your Fintech App

Now the foundations are set, you can start the app development process. Decide between an in-house development team (if available) or outsourcing to an experienced software development company with proven experience like[ Selleo](https://selleo.com/).

### #7: Test Rigorously

Testing is the best and most efficient way to finetune your fintech app before mass release. This is where you can iron out any creases and focus on making the user intuitive as friendly and rewarding as possible. Build an MVP version of your app for early release to a select group of users. Not only does this give you valuable user data, but it also generates a core usership before the full launch.

![Img](https://a.storyblok.com/f/86602/870x521/b0357314b8/update.jpg)

### #8: Update Your App Based On Feedback

Updating your mobile app consistently is crucial throughout the testing and launch periods. Listen to consumer feedback and implement changes accordingly. The job doesn’t simply end after launch. You’ll need to actively keep your app right at the cutting-edge to ensure long-term success.

## Summary

Building a successful fintech mobile application is complex and challenging, but the rewards can be substantial. Fintech is one of the fastest growing industries worldwide, and a revolutionary app is the best way to enter the market. These applications offer unrivalled practicality, advanced features, and cost-effectiveness for businesses and consumers.

Selleo is a trusted global partner in mobile software development, with a dedicated fintech development team leveraging new technology to advance fintech-specific software solutions. We can help you build a successful financial application from planning to implementation.

Get in [contact](https://selleo.com/contact) for more information, and let’s get building!

Keep reading for a comprehensive overview of how to build a successful financial application. 

How To Build A Financial Application: The Development ABC

The RegTech market is expected to grow from [$6.3 billion in 2020 to $16 billion by 2025](https://www.marketsandmarkets.com/Market-Reports/regtech-market-63447434.html?gclid=Cj0KCQjwo-aCBhC-ARIsAAkNQiu1aivuqgtmzEbvtaZnk1NBwrPujspPHWUgirhremxrYPPvDszyD2waAhx2EALw_wcB) at a Compound Annual Growth Rate (CAGR) of 20.3%. Some of the main drivers behind that growth include increased costs of compliance, lower entry barriers with SaaS-based offerings, a rising need for faster transactions and a regulatory sandbox approach to support RegTech innovations.

![Img](https://a.storyblok.com/f/86602/720x283/0e04067777/opportunities-in-regtech-market.png)

The use of Machine Learning, Artificial Intelligence and blockchain all provide growth opportunities for the RegTech market. What is more, the emergence of RegTech into the non-finance sector offers additional revenue streams for vendors in the market.

[TOC]

In this article, we will dive into the world of RegTech solution to discover how to build a software solution that meets compliance and regulatory requirements. Let’s begin!

## What is regulatory compliance and why is it important?

Regulations are the rules that are enforced usually by governmental agencies. They are crucial as they set rules and standards for what can and cannot be done in businesses. One of the most recently introduced policies that is frequently mentioned also in the terms of software development is GDPR in Europe (enforced in 2018) protecting individuals’ personal information. If you wish to get more information about how to make your software GDPR compliant, read the post [How To Meet GDPR Requirements In Mobile And Web Applications](https://selleo.com/blog/how-to-meet-gdpr-requirements-in-mobile-and-web-applications).

The degree of compliance is up to each business to decide based on their risk management practices. Not complying with those regulations can result in high fines and a potential loss of reputation, so the first thing to do when starting any kind of business is to get to know the laws and regulations applicable to your situation as some of them apply to all industries while others are industry-specific. A great example of an industry-specific regulation is HIPAA (Health Insurance Portability And Accountability Act), which is applicable to eHealth software. More about it in the article [How To Make Your Custom Software HIPAA compliant](https://selleo.com/blog/how-to-make-your-custom-software-hipaa-compliant). There are also [Know Your Customer](https://en.wikipedia.org/wiki/Know_your_customer) (KYC) and [Anti Money Laundering](https://www.investopedia.com/terms/a/aml.asp) (AML) regulations strongly connected to the financial sector.

![Img](https://a.storyblok.com/f/86602/720x367/4e6a6a009a/gdpr-hipaa-kyc-aml.jpg)

The main problem with regulation is that there are hundreds of them and new ones appear rather frequently. The best solution is to hire legal staff and create a compliance department that will handle all that, however, not every company can afford it. And this is where Regulatory Technology (RegTech) comes in.

## What is RegTech?

[RegTech](https://selleo.com/regtech-software-solutions-development) is the management of regulatory processes through technology usually within the financial industry. Its main features include regulatory monitoring, reporting and compliance. RegTech consists of a group of companies that use cloud computing technologies through SaaS to help businesses comply with regulations. It is known as regulatory technology.

![Img](https://a.storyblok.com/f/86602/720x439/351ab63e9d/what-is-regtech.jpg)

RegTech was born after the 2008 financial crisis that ushered an increase in financial sector regulation (visit our blog to discover [Top 25 RegTech companies in the EU](https://selleo.com/blog/top-25-regtech-companies-in-european-union-in-2020)). It is a subset of [FinTech](https://selleo.com/blog/what-is-fintech-examples-of-types-features-and-products) - a group of new technologies designed to enhance and automate the use and delivery of financial services. It stands for a community of companies solving challenges of a technology-driven economy as a result of increased data breaches, cyber hacks and other fraudulent activities. Those companies make use of machine learning and big data technologies to reduce risks and aid in ensuring compliance.

<Baner name={regtech} />

### 5 categories of RegTech

After analyzing around 333 [RegTech companies](https://selleo.com/blog/top-25-regtech-companies-in-european-union-in-2020), [Deloitte](https://www2.deloitte.com/lu/en/pages/technology/articles/regtech-companies-compliance.html) managed to identify 5 main categories of Regulatory Technology, which are as follows:

![Img](https://a.storyblok.com/f/86602/720x367/d6d0df895f/5-regtech-categories.jpg)

#### Compliance

Since the regulations world is very dynamic it can be difficult, or nearly impossible, to keep up with all the changes and newest rules. That is why machine learning and AI help to ensure compliance by automating processing like:

* searching for new or changed regulations
* reporting
* data analysis
* sharing the impact of changes

AI algorithms monitor and track the current state of compliance and regulations in real time, eg. [6clicks](https://www.6clicks.io/).

#### Identity management and control

The identity management and control include the Know Your Customer (KYC) processes that are usually performed manually. However, RegTech solutions by making use of AI and machine learning can help gather the necessary information from multiple sources and help to analyse them, eg. [Accuity](https://accuity.com/)

#### Risk management

There are also RegTech solutions that can monitor risk by identifying situations based on delivered data. In the financial sector, they can be used to predict market changes and mitigate risks. It allows detecting compliance and regulatory risks, assessing risk exposure and anticipating future threats, eg. [360factors](https://www.360factors.com/)

#### Regulatory reporting

The right software can aid in the reporting process by automating it without the need of involving employees. As a result, we get correct data on time, limiting possible human errors. The regulatory reporting processes that can be optimized by using AI are:

* regulatory change management
* data validation
* data processing and preparation
* categorization and classification
* analytical calculations

Enabling automated data distribution and regulatory reporting through big data analytics, real time reporting and cloud can bring significant time and cost savings, eg. [acarda GmbH](https://acarda.de/)

#### Transaction monitoring

A process of monitoring transactions that go through banks, online shops or other financial institutions in real time. This helps to identify potentially suspicious activities and flag illegal ones. Robotic Process Automation can help to analyze and monitor transactions faster and more accurately than any separate department by leveraging the benefits of distributed ledged through Blockchain technology and cryptocurrency, eg. [Analyze N Control](http://www.analyzencontrol.in/)

<ReadMore> Read also: [Top 25 RegTech Companies In European Union In 2020](https://selleo.com/blog/top-25-regtech-companies-in-european-union-in-2020) </ReadMore>

### The RegTech process

![Img](https://a.storyblok.com/f/86602/720x367/33b4c3fa38/the-regtech-process.jpg)

Generally speaking, all RegTech processes can be divided into four main parts:

#### Signing up customers

The first must-have of any business or process is customers. Process automation requires understanding the customers’ needs and the compliance requirements that apply to your customers. The signing up process, therefore, involves validating and verifying customer information eg. proper verification of customer’s assets and finances will help you detect any frauds or threats.

#### Monitoring

Monitoring is a process of continuously watching all customer activities. Once they sign up, you get access to their transactions that can be monitored by the software. RegTech uses cloud computing and big data to manage that data flow.

#### Detection

The next step is where machine learning comes in handy. While monitoring transactions and activities it is crucial to look for recurring patterns or flags. Once you have extensive knowledge of types of frauds and their mechanisms, you will be able to write detection logic and use machine learning to discover those patterns and detect them.

#### Reporting

When regulations are not being followed this is where reporting intervene. Once you have enough information about the detected suspicious activity and you can prove a breach you have to report it to the regulatory authorities. No compromises here - this proves the integrity of your services.

<ReadMore> Read also: [What Is Fintech? Examples Of Types, Features And Products](https://selleo.com/blog/what-is-fintech-examples-of-types-features-and-products) </ReadMore>

## How to build a custom RegTech solution?

RegTech solutions are valuable because they standardize regulatory processes while providing clear interpretations and automating compliance processes. There are some key features that turn valuable software into a great one.

* **speed** \- the ability to configure and generate reports quickly is a crucial benefit of any automation software. RegTech accelerates the regulatory compliance process as almost any task can be taken care of by software significantly reducing risks.
* **agility** \- technologies you use should allow extracting, transferring and loading complex data and turn them into ready-to-use information. Thanks to using cloud computing and machine learning RegTech solutions understand the process and quickly adapt to changing regulations.
* **analytics** \- advanced analytical tools can have a great impact on the company’s strategic decisions. Those tools help RegTech represent information in an easy to understand way and filter the data.
* **integrations** \- easy customization and integration with various 3rd party tools make a product suitable for various institutions. The RegTech processes use a different combination of technologies for different steps eg. cloud computing for monitoring, machine learning for the detection phase. Some RegTech solutions can also be integrated into the already existing company’s software.

Since regulatory technologies are a specific domain they imply a strong knowledge of FinTech and law. This requires an experienced team of developers that had previous exposure to this field.

![Img](https://a.storyblok.com/f/86602/720x417/6fdbf8a9aa/how-to-build-a-custom-regtech-solution.jpg)

Generally speaking, the process can be narrowed down to 6 steps:

1. **Research** \- define the scope of your MVP and the features your software should have. Research the solutions available on the market as well as your target clients.
2. **Build a team** \- form an in-house or outsourced team of developers that will help bring your idea to life. It is crucial that they have some experience in the FinTech/RegTech field.
3. **Choose a technology stack** \- there are obviously many programming languages to choose from. Not to mention those responsible for mobile application development. Your team will definitely help you make the right decision, so do not hesitate to consult them.
4. **Design UX/UI** \- the most important thing is to not load your application with loads of unnecessary features. Consider adding some vibrant colours and intuitive navigation.
5. **Test** \- test your solution on a chosen number of customers to gather feedback and ensure if everything works as it should.
6. **Monitor and update** \- since regulations are constantly changing and new ones continuously appear you have to ensure your software stays updated and relevant.

<Baner name={fintech} />

## How we developed compliance and regulatory software?

At Selleo, we have years of experience in building various types of software, including RegTech solutions. Let’s take a quick look at the two of them.

### Alyne - Compliance Management Cloud Software

A SaaS platform for making risk-aware decisions focused on digital assets. The solution aids organisations in all industries in maturing cybersecurity, risk management, compliance capabilities while helping to cost-effectively measure maturity. As a result of the collaboration with the client, our [Ember team](https://selleo.com/ember-expert-developers-team) created a digital dashboard that helps companies know their compliance requirements and perform risk analytics.

The digital dashboard with intuitive navigation and fast searching supports businesses in implementing legal and regulatory requirements and aligning with industry standards.

![Img](https://a.storyblok.com/f/86602/766x612/c01683131c/alyne.png)

If you want to find out more about the project, go to our [portfolio page](https://selleo.com/portfolio/compliance-management-software).

### ECIT Labs- [Compliance Management](https://selleo.com/portfolio/regulatory-compliance-management-software) Application

An app designed to aid in the process of verification of business entities. It helps to streamline the KYC processes and has the ability to perform AML searches. Our [React team](https://selleo.com/react-expert-developers-team) managed to build an application that enhances performance and provides more reliability with regulation compliance. It offers bank-level security of user identification to provide confirmed information about organizations and people. [ECIT](https://www.ecit.com/) delivers an efficient customer experience and increases the overall quality in the accounting service delivery field. More information about the project [here](https://selleo.com/portfolio/regulatory-compliance-management-software).

![Img](https://a.storyblok.com/f/86602/298x559/9c6da87e96/ecit-portfolio.png)

## Conclusions

There are some ground rules that every company has to follow - no matter the size in order to maintain order. RegTech solutions help those companies to continually meet those compliance and regulatory requirements while saving time and money. RegTech uses SaaS technologies, cloud computing, big data and artificial intelligence to manage regulatory compliance and automates the crucial processes. It also helps organizations reduce threats like cyberattacks, security breaches or money laundering.

So if you are looking for a team of developers with vast experience in creating RegTech solutions that will help you ensure your company meets all the compliance and regulatory requirements, contact Selleo to schedule a call.

In this article, we will dive into the world of RegTech solution to discover how to build a software solution that meets compliance and regulatory requirements. Let’s begin!

RegTech Solutions In A Nutshell

Messaging apps certainly changed the way we communicate. They gave us the opportunity to instantly interact with our friends and family just like we would in flesh. The popularity of applications like WhatsApp, Facebook Messenger, Slack or Viber has raised the interest of many tech companies.

If you are one of those people who are wondering how to create a successful messaging chat application, this article is for you!

## Why build a chat application?

To have a successful app you have to understand why they are so popular among people, why they use them.

According to [Facebook](https://about.fb.com/news/2017/11/messages-matter-exploring-the-evolution-of-conversation/), over 80% of adults and 91% of teenagers message every day making it a core part of everyday life. Messaging takes up 67% of all channels of communication.

People use live chats because they are convenient, instant, provide records of conversations, and can be used anywhere.

Worth adding is that in China, an average user has 3 different messengers installed on their smartphone.

As far as the competition is going, WhatsApp is definitely the most popular with 1.500 million users, followed closely by Facebook Messenger with 1.300 million. There are a lot of apps to compete with, so you need to put extra effort to stand out and get users’ attention.

## What are the core features of a messaging app?

There are a lot of features that you can implement in your application, but you should consider what are the must-haves by analysing the most popular solutions and thinking about what you enjoy the most.

* **register** \- depending on the chat app users can register by entering a mobile number or creating an account
* **status** \- users can create a personal profile with details like number, profile image, name
* **search** \- give users the ability to search for their friends
* **voice calls** \- applications like WhatsApp or Viber have the voice calling features
* **video calls** \- you can also have a video call features
* **group chats** \- enable your users to chat with multiple people at once, especially useful when making group plans
* **notifications** \- a crucial function of any messaging application - your users will receive a quick notification when they get a message
* **sharing** \- sharing photos and videos with your friends is an extra advantage of using messengers

## Benefits of chat applications

Although messaging applications are most frequently used by normal people, they are making their way into the business world as well. The importance of instant communication between the coworkers is rising. Video conferencing applications are also gaining popularity in industries like:

* **eCommerce** \- uses live chat to help customers face-to-face. A custom application could also provide the support employees with customers’ purchase history and access to their shopping cart.
* **Finance** \- video conferencing used to chat with clients while discussing investments and financial history. Chat applications lower the customer drop-off rate thanks to instant replies.
* **Healthcare** \- video apps are used to host therapy sessions and health advice improving care coordination.

## What to choose: ready-made vs custom solutions?

An example of a ready-made solution is the so-called **white label aps**. A white label application is an app that displays your own brand instead of one of its creators. The app’s creator gives you the rights to claim the app. As a client, you have a legal right to boast about having built it yourself. A perfect example of such a solution is [Reve Systems White Label Chat Application ](https://www.revesoft.com/products/reve-mobile-ott-solutions)providing you with features like audio and video calling, media sharing or location sharing.

Another example of a white label application is [Zangi](https://zangi.com/custom-communication-solutions), which allows you to fully customize the look of the product with its own colors, logo and features.

Apart from the white label, there are also ready to build solutions. This market primarily consists of **messaging as a service** and **backend as a service**. Messaging as a service are dedicated to building messengers - they are database layers with a messaging layer on top - like Quickblox and Tokbox. Those solutions offer a higher level API which saves development time, but at the same time, you lose some of the flexibility.

As fat as the backend as service goes they are built for a greater range of use cases. Some of them are: Firebase, Pusher or Pubnub. They definitely require more development since you have to design a messaging API and build the messaging layer yourself. However, adding new features in the future is much easier.

A cool solution worth checking out is also [Applozic](https://www.applozic.com/) - a ready SDK for building chat applications with a secure and scalable backend.

If you do not know what to use ready-made solutions you can build one from scratch. When doing so there are some key steps to consider:

1. find a platform: Native or Hybrid - knowing if your application will be targeted towards Android or iOS users is crucial.
2. define the target audience - who does your app target? The general population of business professionals? Your target audience will influence the range of features implemented in your app.
3. MVP - determine how should the MVP look like and what are the must-have features
4. development time - when it is time to start your development you need to find developers: remotely or in-house. Finding an experienced team can be tricky, you can read more about it in our article …

<Baner name={software-development} />

## WebSockets vs WebRTC

WebSockets are bidirectional mechanisms for browser communication. A web browser connects to the web server by establishing a WebSocket connection. WebSockets have great concurrency and optimization of performance. They are great for building responsive and rich web applications.

On the other hand, WebRTC enables sending data across a browser without the need to relay that data through a server. WebRTC allows setting up peer-to-peer connections to other web browsers quickly and easily. It is great for building dating services and social network applications.

For a chat application, the better choice would be to use WebSockets as the communication is simpler and they provide us with more features and benefits.

For a more in-depth comparison, take a look at [WebSockets vs WebRTC](https://www.educba.com/websockets-vs-webrtc/).

## How to build a messaging app: step by step

There are a couple of different ways to build a messaging app. I will focus on building the back-end with Amazon ElastiCache for Redis and the front-end using React + Socket.io client. However, you can also build with:

* [AWS](https://aws.amazon.com/blogs/mobile/building-a-serverless-real-time-chat-application-with-aws-appsync/) \- this will allow you to create a serverless real-time chat application with AppSync. AWS AppSync is a fully managed GraphQl service. It can be used to build collaborative mobile and web applications with responsive user experience with online and offline capabilities. More information can be found in the[ AWS AppSync Developer Guide](https://docs.aws.amazon.com/appsync/latest/devguide/graphql-overview.html)
* Socket + Node.js - Node.js combined with Socket allows us to build a real-time chat application. The most important advantage here is the fact that with Node.js JavaScript is used to build both the front-end and the back-end of your application. More about this you can find here: [How to build a real time chat application in Node.js using Express, Mongoose and Socket.io](http://freecodecamp.org/news/simple-chat-application-in-node-js-using-express-mongoose-and-socket-io-ee62d94f5804/)

### Building a chat application with Amazon ElastiCache for Redis

As building a chat application requires a communication channel which will be used to send messages to be further redistributed to other participants. Such a communication can be implemented using the PubSub pattern.

A PubSub pattern is implemented on a backend server to which the client communicates using WebSockets. It is also important to mention that in this case, it is good to use a multi-server architecture, which increases reliability and elasticity. In this type of server architecture, a client makes a WebSocket connection to a load balancer, which forwards traffic to a pool of servers.

#### Backend

##### 1. Setting up Redis with WebSockets

**declare HTTP application and WebSockets using express**

A WebSocket is established with a PubSub application when the web client is opened in the browser. The application assembles data for existing members and messages.

~~~
var express = require('express');
var app = express();
var http = require('http').Server(app);
var io = require('socket.io')(http);
var port = process.env.PORT || 3000;
~~~

**establish connections to the Redis cluster**

The application must establish multiple connections to the Redis cluster: one needed to make updates to Redis data model and to publish messages on a topic. Other one for each of the topic subscription

~~~
var Redis = require('ioredis');
var redis_address = process.env.REDIS_ADDRESS || 'redis://127.0.0.1:6379';

var redis = new Redis(redis_address);
var redis_subscribers = {};

function add_redis_subscriber(subscriber_key) {
   var client = new Redis(redis_address);

   client.subscribe(subscriber_key);
   client.on('message', function(channel, message) {
      io.emit(subscriber_key, JSON.parse(message));
   });

   redis_subscribers[subscriber_key] = client;
}

add_redis_subscriber('messages');
add_redis_subscriber('member_add');
add_redis_subscriber('member_delete');
~~~

**serialize objects to JSON**

Objects are serialized to be stored as values in Redis data types and published on PubSub topics. Those strings have to be deserialized to a JavaScript object before being published over WebSockets.

~~~
io.on('connection', function(socket) {

... application business logic ...

}
~~~

**establish connections with client**

##### 2. Initialize a new client connection

1. The current list of members is retrieved.
2. Unless this is a client reconnecting, a new member is created with a random user name and avatar URL, and then stored in a Redis Hash.
3. A truncated list of historically recent messages is retrieved.

~~~
var get_members = redis.hgetall('members').then(function(redis_members) {
   var members = {};
   for (var key in redis_members) {
      members[key] = JSON.parse(redis_members[key]);
   }
   return members;
});
~~~

##### 3. Message handling

When a new client is completing its initial WebSocket connection we must define a message handler for messages to be sent by the new client.

* define message handler for messages
* add the message to the message history
* publish the messages topic

~~~
socket.on('send', function(message_text) {
var date = moment.now();
var message = JSON.stringify({
   date: date,
   username: member['username'],
   avatar: member['avatar'],
   message: message_text
});

redis.zadd('messages', date, message);
redis.publish('messages', message);
});
~~~

##### 4. Disconnection handling

When a heartbeat from the Websocket established when a client connects to the server fails, a disconnect event is fired.

~~~
socket.on('disconnect', function() {
   redis.hdel('members', socket.id);
   redis.publish('member_delete', JSON.stringify(socket.id));
});
~~~

`Redis.HDEL` is used to remove client from the member Hash and since we notified all participants of a new member joining the chat room, we must also notify all participants that a member is leaving the chat room.

##### 5. Application stack deployment using AWS CloudFormation

CloudFormation gives developers and system administrators an easy way to create and manage AWS resources. It provisions and updates those resources. Go [here](https://console.aws.amazon.com/cloudformation/home?region=us-east-1#/stacks/new?stackName=chatapp&templateURL=https://s3.amazonaws.com/elasticache-refarch-chatapp/chatapp.yaml) to launch a stack. CloudFormation will create an Elastic Beanstalk environment, application and configuration template. It also creates the ElastiCache cluster for Redis and Amazon EC2 security groups for the load balancer, application servers, and Redis cluster.

To modify the configuration of the Elastic Beanstalk Nginx proxy configuration to support WebSockets we must enable sticky sessions so that the same instance responds when the client makes two consecutive HTTP requests to upgrade the connection to use Websockets. We must make a small configuration change to Nginx by using the .ebextensions mechanism for Elastic Beanstalk.

~~~
container_commands:
   enable_websockets:
      command: |
        sed -i '/\s*proxy_set_header\s*Connection/c \
                proxy_set_header Upgrade $http_upgrade;\
                proxy_set_header Connection "upgrade";\
         ' /tmp/deployment/config/#etc#nginx#conf.d#00_elastic_beanstalk_proxy.conf
~~~

#### Frontend

1. First of all, create a project using

`npx create-react-app chat-app-client`

1. Then, install `socket-io-client` with

`npm i socket.io-client`

1. Use `App.js` to create a simple view with a list of messages and `input` to send a new one
2. To handle creation and destroying of `socketIOClient` use `useEffect`

Let’s take a look at the code:

~~~
import React, { useState, useEffect } from "react";
import socketIOClient from "socket.io-client";
const ENDPOINT = "http://127.0.0.1:3000";
function App() {
  const [messages, setMessages] = useState("");
  const [inputVal, setInput] = useState(“”);
 const handleSubmit = () => socket.emit('send', inputVal);
  useEffect(() => {
    const socket = socketIOClient(ENDPOINT);
    socket.on("messages", data => {
      setMessages(data.messages);
    });
  }, []);
  return (
    <div>   
      <div>
        { messages.map(message => <p>{message}</p>) }
      </div>
      <form onSubmit={handleSubmit}>          
        <input type="text" value={inputVal} onChange={val => setInput(val)} />
        <input type="submit" value="Send" />
      </form>
   </div>
  );
}
~~~

## Conclusions

This article was created to help you build your own messaging chat application since their popularity is constantly growing and many companies aim to create their own solutions similar to WhatsApp or Facebook Messenger.

When building your solution remember to implement features like notifications, video and text chat, file sharing and group creation.

If you are looking for a team of experts to support the development of your messaging application, contact us. With years of experience, we will ensure your product will be able to compete with the biggest names out there.

Messaging apps certainly changed the way we communicate. They gave us the opportunity to instantly interact with our friends and family just like we would in flesh. If you are one of those people who are wondering how to create a successful messaging chat application, this article is for you!

How To Build A Messaging Chat App

Are you interested to know what is Fintech? Its features and products? How will Fintech change the way we do business? If so, give this post a read.

What Is Fintech? Examples Of Types, Features And Products

\[TOC\]

## What is RegTech?

After the financial crisis of 2008, the situation of the financial institutions in Europe was miserable. The so called bubble had busted, making everything go down with high-interest rates, inflation, and no regulations to keep the condition at a constant pace. To control the situation, various banking rules, anti-money laundering policies, financial directives, and terrorist financial reglementations were implemented both on the national and regional levels. This has increased the regulatory pressure on companies to follow these policies. Only in the three year period between 2009 and 2012, over 50,000 regulations were implemented across G20.

The financial crisis gave birth to a revolutionary IT dynamic, which later came to existence as RegTech Solutions. **RegTech solutions offer the support to financial institutes (FIs) to compliances, gaining support from regulators and investors.**

Before these solutions were designed, the process of creating regulations and implementing them was a hassle and costly. According to Regtech Council (1), it took 30,000 pages and around 1.5 million paragraphs to describe the rules in MiFID II. The entire process costs around €2.5bn to implement the new regulations. Having such a costly and hassle-filled process led to the need to create an automated financial solution.

Realizing the need, a wave of startups has emerged, offering the technological solution to companies that efficiently and cost-effectively manage the overload of compliance. These new startups or “RegTech” companies are a mostly young organization that offers SaaS cloud-based solutions to bring agility, speed, integration, and analytics to meet regulatory expectations and manage risks.

As per the report from[ Juniper Research](https://www.juniperresearch.com/home) the total spending on Regtech industry will grow by an average of 48% per annum. Over the next five years, the investment will rise from $10.6 billion in 2017 to $76.3 billion in 2022.

![](https://lh5.googleusercontent.com/uXAWdncipJ-EUy-yIgcSbJer1ju9_TBtlV40GJfQQJX6riHv9XJ882hbfyk3t-8hZ4S2TB3-bQUqr4MkBDQarbiNoj0pv_olGXC52V8Hvc3ciF-LOq7bMsFTBjr6wsQXjfsgS-zy)

Here’s a small graphical representation of the popularity of RegTech based on the type of industry. This report was compiled by “Burnmark.”

![](https://lh4.googleusercontent.com/kb4247bkGlSkYy8c3ooir0os8or4vopN6auAPZBfqfxdGyv-N5IbMHcuVGL35UFDrHcoxzJgno5VBlL_HRvJpLfhNGvGw6xcBEkqIHxGkouzRQKyUtQ5R0MDW9DS3kR03IeZhQFD)

Let’s have a detailed introduction to RegTech and see what this technology is all about.

## What are RegTech Solutions?

RegTech is a **Regulatory Technology designed to improve the way businesses manage regulatory compliance**. It consists of a group of companies using cloud computing technology through SaaS to help businesses comply with regulations efficiently and less expensively. The main functions of RegTech are to perform regulatory monitoring, reporting, and compliance.

### Why are RegTech Solutions Important?

By combining the **ultra-advanced technology of machine-learning technology**, RegTech reduces the risk to a company’s compliance department by offering data on money laundering activities conducted online. All the activities that a traditional compliance team may not be privy to due to the increase of underground marketplaces online.

It helps the companies to lift some burden from their Risk and Compliance teams as the regulatory landscape is moving at a superhuman pace. Do you know that in Europe, a new regulation is passed every 7 minutes? The change in regulation has reached almost 500% in the last decade.

When RegTech was introduced in the financial sector, it was welcomed with a healthy dose of skepticism. The basic concern of investors at that time was the margin of error. Knowing that the world of regulatory compliance is vast and complex, and the chances of error are massive.

![Img](https://a.storyblok.com/f/86602/720x422/836f60566d/what-services-regtech-solutions-offer-to-companies.jpg)

## What Services RegTech Solutions Offer to Companies?

It has only been a few years since the industry has emerged. **The growth and popularity of RegTech solutions are exponentially growing every day**. New features are being introduced with every passing day to improve regulatory compliance.

Here we are listing some of the very basic functions a RegTech solution offers to FIs.

* Data management solutions
* KYC (Know Your Customer) and AML (Anti-Money Laundering) solutions
* Tax management solutions
* Risk management solutions
* Records management solutions
* Trade monitoring solutions
* Reporting solutions
* Portfolio risk management solutions
* Quantitative analysis solutions
* Solutions that help companies manage a specific regulation (like [GDPR](https://www.ascentregtech.com/blog/the-rise-of-data-privacy-regulation-and-how-regtech-can-help/))
* Regulatory change management solutions

## Why Does RegTech Solution Matters for FIs?

Every business in any region of the world has the freedom to generate real value and profits, but only if meeting the law and regulations. Many times, protecting the consumers, businesses overpass the regulations.

Thousands of new regulations and compliance police have been passed and amended in the last decade. Keeping up with these regulations and policies seems an inhuman task. **With RegTech, it becomes a lot easier for businesses to comply, unlocking both opportunity and wealth without compromising on consumer interests.**

Just imagine the criticality of compliances, if not meet within the limitation set by authorities. Many banks have paid millions as a penalty for not meeting the regulations in Europe. In the world of regulations, laws are written on computers but followed by post-it notes and excel sheets. This juxtaposition is unsustainable.

Hiring, training, and maintaining a department costs millions every month to FIs. But with RegTech, the cost has reduced to only a few thousand, making it a better world for everyone.

**Do you want to create your own RegTech solution? Our [experienced team](https://selleo.com/software-development-team/fintech) will be happy to help you!**

## How RegTech can help Financial Services

Let’s discuss the functionality of RegTech and how it benefits an FIs in detail.

### Keeping Financial Services Regulators Happy

The EU is trying really hard to keep a balance in their Financial Sector for which they need to create and implement regulations and compliance policies. In this regard, many countries included in the EU have amended their laws and regulation and keep doing so.

As mentioned earlier, every 7 minutes, a new regulation is passed in Europe, making it inhumane to keep up with the pace. If a business is operating internationally and outside Europe, having knowledge of each regulation is essential. **A RegTech solution makes it very easy for businesses to keep themselves updated regarding changing regulations and compliance policies.** And, when businesses are following compliance policies, it makes the financial service regulators happy.

### Lowering Costs for Financial Services

![Img](https://a.storyblok.com/f/86602/720x422/d5d799eb42/lowering-costs.jpg)

The cost of complying with complex and rapidly-changing regulations across multiple jurisdictions effectively amounts to an 8% tax on every firm doing business in the financial space.

The situation is even worse for Global Banks as they need to compete in a tough global marketplace where their regulatory responsibilities increased exponentially. On average, a large financial institute spends around $10,000 per employee to manage legal and regulatory risk. And, when it comes to managing complex challenges of MRAs and MOUs can even cost major banks upwards of $1 million apiece. Clearly, it is too expensive to keep doing business in this way.

With a RegTech, the cost reduces to a great extent making it a lot easier to keep your business in accordance with regulations and compliance policies.

The major component of a RegTech is SaaS, cloud computing, Big Data, and most advanced technology of Biometric. Combining machine-learning and the use of advanced technology makes it easier for FIs to implement Artificial Intelligence in their operation, and the biggest example of it is RegTech.

### RegTech Allows to Identify Users by Biometrics

Biometric is the most advanced technology to identify a person on his/her own individuality. Biometric offers a more user-friendly and secure option for authentication. Thanks to RegTech, now banks can verify consumers using Biometric technology. The integration of Biometric technology has reduced the risk of money-laundering and frauds to a great extent.

## What are Some Areas of Application for RegTech?

Let’s get to know the important areas of application for RegTech.

* **Big Data**

RegTech companies are running the application based on Big Data to analyze consumer identification. It is one of the main components of RegTech solutions.

![Img](https://a.storyblok.com/f/86602/720x422/2e74fc4cab/cybersecurity.jpg)

* **Cybersecurity**

Data breaches and online fraud are most common since technology has evolved and took over the financial sector. RegTech using advanced technology helps prevent these breaches by using strong encryption and end-to-end anonymity over the system.

* **Macroprudential Policy**

Like all other regulations, RegTech helps FIs to strictly follow Macroprudential Policies. These policies are created to ensure the stability of the financial system as a whole. It prevents the system from substantial disruptions in credit and other financial services.

* **Identity Management**

Having knowledge of the customer and specific regulations to prevent money laundering and the financing of terrorism is very important. Using Artificial Intelligence or Business Intelligence (BI) technology helps RegTech companies to improve the overall identity management of the system.

* **Risk Management**

RegTech helps FIs by automatic identification and management of risk sources by analyzing the patterns and management of large volumes of information. It controls the overall risk involved in these activities.

* **Compliance**

RegTech manages the overall compliance of a company by conducting automatic monitoring of the company’s compliance with policies and procedures. It keeps the compliance intact with different applicable laws and regulations, from customer protection procedures to tax and commercial aspects.

* **Regulatory Update**

The biggest functional area of RegTech is the identification and interpretation of regulatory changes and analysis of their impact on the company.

* **Analysis and Reporting**

It performs advanced analysis of large volumes of data using an automatic generation of communications to different authorities.

<Baner name={software-development} />

## Top 25 RegTech Companies in Europe

We have created a list of top 25 European RegTech companies and some of their basic details. Let’s have a look:

### Alyne

![Img](https://a.storyblok.com/f/86602/347x261/a0ac20d402/alyne_logo.png)

Location: Germany Domain: Cybersecurity, Risk management

Website: [www.alyne.com/en](http://www.alyne.com/en/product/features)

Speciality:

* Offers extensive control set templates
* Delivers mapped Laws and regulations

### Blinking

![](https://s3.amazonaws.com/a.storyblok.com/f/86602/400x82/6ce948d0bd/blinking_logo.png)

Location: Serbia

Domain: Onboarding process, tools and controls

Website: [https://blinking.id](https://blinking.id/product.html)

Speciality:

* Offers digital identification of users
* Delivers digital onboarding process
* Offers Blockchain based document management system

### CleverSoft

![Img](https://a.storyblok.com/f/86602/392x88/316f0b0354/cleversoft_logo.png)

Location: Benelux & Germany

Domain: Onboarding process, reporting systems

Websie: [www.clever-soft.com](http://www.clever-soft.com)

Speciality:

* Offers optimizing regulation documents, marketing materials
* Optimizes commission payments

### ComplyAdvantage

![Img](https://a.storyblok.com/f/86602/401x137/9c00e8595f/comply-advantage_logo.png)

Location: Romania

Domain: Cybersecurity

Website: [https://complyadvantage.com](https://complyadvantage.com/aml-compliance-solutions/)

Speciality:

* Offers compliance solutions
* Delivers transaction monitoring
* Offers payment screening

### Corlytics

![Img](https://a.storyblok.com/f/86602/206x57/0ab55ea7df/corlytics_logo.png)

Location: UK & Ireland

Domain: Risk management, Compliance management

Website: [www.corlytics.com](http://www.corlytics.com)

Speciality:

* Offers Taxonomy mapping
* Offers Advisory services
* Offers Risk management solutions that allows to plan investments

### CyNation

![Img](https://a.storyblok.com/f/86602/400x97/61850d1f7e/cynation_logo.png)

Location: UK & Netherlands

Domain: Cybersecurity, Risk management

Website: [www.cynation.com](http://www.cynation.com)

Speciality:

* Offers analytics powered by AI and machine learning
* Offers automated vulnerability and assessment solutions

### DataGuard

![Img](https://a.storyblok.com/f/86602/400x152/71c787a075/dataguard-logo.png)

Location: Germany

Domain: CyberSecurity

Website: [https://www.dataguard.com](https://www.dataguard.com/#services)

Speciality:

* Supports with GDPR in companies
* It offers solutions to many businesses

### Dathena

![Img](https://a.storyblok.com/f/86602/400x109/b11f4a0ff4/dathena_logo.png)

Location: Switzerland & France

Domain: Cyber security, Information risk

Website: [www.dathena.io](http://www.dathena.io)

Speciality:

* Offers Data classification solutions
* Offers Cloud access security
* Delivers data access monitoring

### ElectronicId

![Img](https://a.storyblok.com/f/86602/400x400/4ea999c5f4/electronicid_logo.png)

Location: Spain

Domain: Onboarding process

Website: [www.electronicid.eu](http://www.electronicid.eu)

Speciality:

* Delivers video verification
* Delivers Face verification
* Delivers Signature solution

### FacePhi

![Img](https://a.storyblok.com/f/86602/151x151/0d9b5c3c98/facephi_logo.png)

Location: Spain

Domain: Facial Recognition, Mobile biometrics

Website: [https://www.facephi.com](https://www.facephi.com/en/content/products/)

Speciality:

* Delivers VoicePrint solutions
* Delivers eye biometrics solution
* Deliver facial recognition solutions

### Fenergo

![Img](https://a.storyblok.com/f/86602/400x312/0362dfad66/fenergo_logo.png)

Location: Ireland

Domain: Risk Management, Onboarding Verification

Website: [https://www.fenergo.com/](https://www.fenergo.com/)

Speciality:

* Client risk rating
* Anti-money laundering
* Automated client orchestration

### 4STOP

![](https://s3.amazonaws.com/a.storyblok.com/f/86602/150x80/77858083e5/4stop_logo.png)

Location: Germany

Domain: Onboarding Verification , CyberSecurity

Website: [https://4stop.com/](https://4stop.com/)

Speciality:

* Delivers Document verification
* KYC services
* Anti-fraud systems

### Governance

![Img](https://a.storyblok.com/f/86602/400x64/c08ca63f08/governange-logo.png)

Location: Luxembourg & Netherlands

Domain: Onboarding, Monitoring, Reporting

Website: [https://www.governance.com](https://www.governance.com/solutions)

Speciality:

* Procedures management solutions
* Business continuity management solutions
* Fund management solutions

### Hawk:AI

![](https://s3.amazonaws.com/a.storyblok.com/f/86602/400x243/e973cad569/hawkai_logo.png)

Location: Germany

Domain: Onboarding, Monitoring Detection

Website: [https://hawk.ai/en](https://hawk.ai/en/solutions/)

Speciality:

* Crime pattern detection solution
* Real time transaction monitoring
* Audit proof AI explainability

### IDpal

![Img](https://a.storyblok.com/f/86602/400x400/74dde76ff5/idpal_logo.png)

Location: Ireland

Domain: Onboarding

Website: [https://www.id-pal.com/](https://www.id-pal.com/key-features/)

Speciality:

* User identification solution
* User friendly experience
* Easy API integration

### Privitar

![Img](https://a.storyblok.com/f/86602/400x92/72c0768a2e/privitar_logo.png)

Location: UK & Poland

Domain: Cybersecurity

Website: [https://www.privitar.com](https://www.privitar.com/solutions/)

Speciality:

* Anti-money laundering
* Regulatory compliance solution
* Data sovereignty

### RegBot

![Img](https://a.storyblok.com/f/86602/260x60/47087dcb99/regbot_logo.png)

Location: Spain, Ireland & UK

Domain: Regulatory compliance, cybersecurity

Website: [https://www.regbot.net/](https://www.regbot.net/products/#products-xborder)

Speciality:

* Delivers complete services to end user
* Delivers client protecting bots during compliance process

### Kompany

![Img](https://a.storyblok.com/f/86602/400x97/40e75c3c99/kompany_logo.png)

Location: Austria

Domain: Onboarding process, monitoring process

Website: [https://www.kompany.com/](https://www.kompany.com/)

Speciality:

* Automate compliance process
* Instant access to verified companies data
* Access through web tool or REST API

### Onfidio

![Img](https://a.storyblok.com/f/86602/300x71/f44eb87f8b/onfidio_logo.png)

Location: Portugal

Domain: Onboarding process, cybersecurity

Website: [https://onfido.com/](https://onfido.com/solutions/our-solutions)

Speciality:

* Document verification
* Biometric verification
* Authentication

### LUXHUB

![Img](https://a.storyblok.com/f/86602/200x200/41cde5b357/luxhub_logo.png)

Location: Luxembourg

Domain: Process & Control Tools

Website: [https://www.luxhub.com/](https://www.luxhub.com/)

Speciality:

* Offers Compliance API
* LuxHub ONE integrates financial services with one API

### Muinmos

![Img](https://a.storyblok.com/f/86602/200x200/0b082d57ca/muinmoss_logo.png)

Location: Denmark

Domain: Regulatory compliance

Website: [https://muinmos.com](https://muinmos.com/our-solution/)

Speciality:

* Enables client categorization
* Enables compliant cross border and third country selling

### AQMetrics

![Img](https://a.storyblok.com/f/86602/351x172/b3fa5e05e5/aqmetrics_logo.png)

Location: Offices in EU

Domain: Risk management, Regulatory compliance

Website: [https://www.aqmetrics.com](https://www.aqmetrics.com/)

Speciality:

* Tracking investors activity
* Receiving risk alerts and notifications of compliance breaches

### New Banking Identity

![Img](https://a.storyblok.com/f/86602/400x109/a8a60b240a/new-banking-identity_logo.png)

Location: Denmark

Domain: Onboarding process

Website: [https://newbanking.com/business/](https://newbanking.com/business/)

Speciality:

* Protecting and controlling your personal data
* Client are the owners of their data

### ForcePoint

![Img](https://a.storyblok.com/f/86602/181x34/38c7af9d4f/forcepoint_logo.png)

Location: Offices in EU

Domain: CyberSecurity

Website: [https://www.forcepoint.com](https://www.forcepoint.com/products)

Speciality:

* Provides cloud security solutions
* Data security solutions
* Network security solutions
* Company provides services to many governments

### ScaledRisk

![Img](https://a.storyblok.com/f/86602/400x109/f2f5f97b79/scaledrisk_logo.png)

Location: France

Domain: Onboarding process, Risk management

Website: [https://www.scaledrisk.com](https://www.scaledrisk.com/product-en/)

Speciality:

* Delivers multi-criteria analysis of performance and risk
* Track assets under management and performance day-by-day

## Summary

RegTech’s popularity and familiarity are in subverting this dichotomy. It helps create a world where it is easier for businesses to comply, unlocking both opportunity and business value without compromising consumer protection, creating a better world for everyone.
If you are running a business in the financial sector and want to comply with regulations, you should consider implementing Regtech in your company. To get better guidance, you can always [contact experts at Selleo](https://selleo.com/contact).

The financial crisis gave birth to a revolutionary IT dynamic, which later came to existence as RegTech Solutions. RegTech solutions offer the support to financial institutes (FIs) to compliances, gaining support from regulators and investors.