Scotland's world-class RegTech sector
11 Nov 2025 • 4 minute read
The expanding RegTech sector in Scotland is transforming regulation across industries with opportunities for innovation.
Image credit: Denis Putilov / Alamy photo.
RegTech stands for regulatory technology. Home to over 40 RegTech firms, Scotland is showing that smarter regulation can drive business growth, minimise risk, enhance efficiency, and strengthen trust with customers and regulators.
The technology uses advanced tools like AI, data analytics, blockchain and automation to help businesses comply with complex regulations more efficiently.
RegTech enables organisations to free up resources, and increase transparency and productivity, while building trust securely. The business benefits include lower costs and risk, and the ability to turn regulatory requirements into opportunities for innovation and growth.
Scottish RegTech excels across multiple sectors
A PwC Global Compliance survey from 2025 highlighted the growing importance of RegTech in the financial sector. It showed this industry continues to make progress in embracing compliance technology, with data-led approaches used by regulatory authorities.
Hosting over 250 companies, Scotland’s has a thriving fintech ecosystem with access to talent to develop the RegTech sector. It also has the UK’s largest financial sector after London, and benefits from support through FintechScotland, a cluster management organisation.
The RegTech sector is also expanding across other industries in Scotland, including space, energy, manufacturing, food and drink and utilities. In the health sector, there are proven use cases of automation to accelerate recruitment and applicant screening timelines.
The space sector is an example in which regulations are still developing. For example, as regulations evolve internationally, they could be used as a practical framework for licensing, sustainability and cross-border compliance.
Dr Basu is a convenor for the University of Strathclyde’s RegTech Forum. This brings together regulators and academics to discuss sector development. He believes that cooperation and collaboration between both entities is important to achieve a healthy and innovative financial system.
RegTech can also help companies develop processes to comply with the Digital Product Passport (DDP) under the Ecodesign for Sustainable Products Regulations (ESPR). It achieves this by automating data collection, standardising sustainability information, and delivering secure reporting to meet EU requirements.
How RegTech is accelerating transparency for banks
RegTech companies in Scotland vary in size, from businesses with global operations to university spinouts just entering the market.
One global, fintech company is Encompass Corporation, which has moved to larger offices in Glasgow, and is listed in the prestigious and globally recognised RegTech 100.
Encompass provides solutions to verify Corporate Digital Identity (CDI) and meet Know Your Customer (KYC) requirements. These requirements are within the onboarding processes of larger cross-border banks. According to Balani, the company’s solutions can automate and accelerate these onboarding processes within a matter of hours rather than weeks.
Checks are crucial to verify the identity of new customers to reduce risk for a bank when opening new accounts. Failure to have adequate KYC processes in place can result in significant fines, which can run into millions.
Encompass was also attracted to Glasgow because of the opportunity to collaborate with academia and build connections with the government. Another drawcard was Scotland’s lower business running costs compared with other global locations around the world, coupled with a strong talent pool from financial services and world-class universities.
“In Scotland, there’s that level of cooperation, that willingness to partner and work with us. That’s why we’ve always felt that working in Glasgow was the right thing to do, and continues to be right for us," adds Dr Balani.
Tech to combat fraud from AI and deep fakes
Alongside international businesses, Scotland is also home to smaller start-ups and spinouts from its universities in the fintech and RegTech spaces.
Recent high-profile cases of highly sophisticated AI voice impersonations and deepfake frauds underline the need for greater protection against fraud. Falling victim to such an attack may result in immediate financial losses but may also lead to severe financial penalties from regulators.
Edinburgh-based Lasting Asset defines itself as a ‘trust tech’ company, overlapping with the RegTech space. It provides call-spoofing protection, alerting customers about who is calling them through secure cloud services to deliver real-time fraud detection.
“I’ve lived in multiple parts of the world, from Asia to the US and Europe. Scotland is possibly one of the best places in the world to receive early-stage support, especially for startups coming out of universities or academics building innovative technology,” says Dr Nanik Ramchandani, CEO, Lasting Asset.
Funding from Scottish Enterprise High Growth Spinout Programme (HGSP)
Ramchandani has supported two tech startups from Edinburgh Napier University, acting as a commercial champion for more than three years. He's helped academics translate their technologies into business ideas. Both startups have received vital funding grants from the Scottish Enterprise High Growth Spinout Programme (HGSP).
Another industry strength is the presence of regulators in Scotland that collaborate and develop RegTech solutions for adoption in different industries. Regulators with offices in Scotland include the Financial Conduct Authority (FCA), the Information Commissioner’s Office (ICO), the Competition and Markets Authority (CMA), and the Health and Safety Executive (HSE).
-
How Scotland supports investors
Our investor-friendly policies can support your investment and development in Scotland. This is bolstered by Scotland's partnership approach and attractive business rates.
-
Fintech companies in Scotland
If you’re looking to expand your data capabilities, elevate your offering or improve your services with the newest tech, Scotland is ideal for fintech companies.
-
Apadmi builds its future in Scotland's fast-emerging AI sector
Scotland’s huge financial sector gives Apadmi access to terrific talent, enabling this tech business to reach exciting new places. Discover its success story.
You might also be interested in
Join our mailing list
Get the latest updates, insights, and opportunities in trade and investment straight to your inbox.
Got a question?
We’re always ready to help. Send us an enquiry, or give us a call.