RegTech for Payment Firms: Tools, Vendors, and Implementation Frameworks

Regulatory technology — RegTech — has evolved from a buzzword to a genuine operational necessity for payment firms in 2026. The compliance obligations facing an FCA-authorised EMI are extensive: AML/CTF transaction monitoring, KYC and KYB verification, sanctions screening, PEP identification, adverse media monitoring, regulatory reporting, and for crypto-active firms, blockchain analytics. No modern payment firm can meet these obligations at scale using manual processes alone. The question is not whether to invest in RegTech, but which tools to deploy, how to integrate them, and how to govern them as a regulated technology stack.

The RegTech Stack

A payment firm's RegTech requirements typically fall into five categories: identity verification and onboarding; ongoing screening and monitoring; transaction monitoring; regulatory reporting; and, for crypto-active firms, blockchain analytics. Each category has multiple vendor options, and the firm must make build-vs-buy decisions for each layer, assess vendor capabilities against its specific risk profile, and ensure that the integrated stack can provide the audit trail and explainability the FCA expects.

Identity Verification and KYC/KYB

Digital identity verification for individuals is now a mature market, with vendors including Jumio, Onfido, Sumsub, IDnow, and Veriff offering document verification (passport, driving licence), liveness checks, and database matching. These tools are well-tested for consumer-facing onboarding. For B2B payment firms onboarding corporate clients — which involves KYB rather than KYC — the toolset is less commoditised. Corporate KYB vendors including Comply Advantage, Acuris (now a part of Kroll), LexisNexis, and Dun & Bradstreet provide automated company data retrieval, beneficial ownership mapping, and adverse media search. The FCA expects that automated corporate KYB tools are supplemented by human review for complex structures — automated tools struggle with multi-layer offshore ownership chains, trust structures, and nominee arrangements.

Ongoing Screening: Sanctions, PEPs, and Adverse Media

Continuous screening against sanctions lists, PEP databases, and adverse media sources is required on an ongoing basis — not just at onboarding. The major vendors in this space are Refinitiv World-Check, Dow Jones Risk & Compliance, LexisNexis World Compliance, Comply Advantage, and ACAMS Risk Assessment. Each offers different coverage, update frequencies, and alert management interfaces. Key evaluation criteria include: update frequency for sanctions lists (the OFSI and OFAC lists can update daily following significant geopolitical events); coverage of global PEP databases; adverse media language coverage; and false positive rate in the context of the firm's specific client population.

Transaction Monitoring

As discussed in our dedicated article on transaction monitoring systems, the market divides between rules-based platforms (FICO, Actimize, Oracle FCCM), machine learning platforms (Feedzai, DataVisor, Featurespace), and specialist payment fraud tools (Stripe Radar for consumer-facing payments). For an EMI serving primarily institutional or corporate clients — iGaming operators, crypto exchanges, FX brokers — the transaction monitoring requirements differ from consumer payment platforms. Alert volumes may be lower but the significance of each alert higher, and the human review process must be calibrated accordingly.

Blockchain Analytics

For payment firms with any crypto exposure — directly or through clients — blockchain analytics tools are now effectively mandatory. Chainalysis KYT (Know Your Transaction), Elliptic Navigator, and TRM Labs are the leading platforms, each offering on-chain risk scoring, sanctions screening for wallet addresses, and cluster analysis to identify wallet address relationships. The integration between blockchain analytics and the firm's core transaction monitoring system is critical — alerts from Chainalysis KYT should flow into the firm's case management system and be reviewed through the same process as off-chain transaction monitoring alerts.

Regulatory Reporting

FCA regulatory reporting — the FCA1, FCA2, and other returns submitted quarterly via RegData — can now be partially automated. Several vendors offer regulatory reporting automation tools that pull from the firm's financial and transaction data to pre-populate returns, reducing manual calculation errors and submission delays. For firms with complex volume calculations under Method B or C, automated reporting tools are a sensible investment once the firm reaches meaningful transaction volumes.

Governance of the RegTech Stack

The FCA expects payment firms to govern their RegTech tools as part of their control environment — not simply to outsource compliance to vendors. This means: documented vendor due diligence at selection; contracts that give the firm access to audit rights, SLA commitments, and incident notification; regular testing of system outputs against known scenarios; and documented escalation procedures where a tool fails or produces unexpected outputs. The compliance function should conduct periodic reviews of each RegTech vendor's coverage, accuracy, and regulatory standing — a vendor that is itself subject to regulatory action or has known data quality issues may create a compliance gap for the firm.