Reviewed by Dr. Dmytro Nasyrov, Founder and CTO • Last updated April 24, 2026
Compliance and RegTech Solutions
KYC/AML platforms, regulatory reporting systems, transaction monitoring and compliance automation.
- 15+ FinTech projects
- 12+ years in business
- 90+ Clutch reviews
Reviewed by Dmytro Nasyrov
Founder and CTO
23+ years in custom software development. Led 70+ projects across FinTech, healthcare, Web3 and enterprise. ISO 27001 certified team.
What is compliance and RegTech software?
Authoritative citations 12 sources
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PCI DSS v4.0 Standard
The Payment Card Industry Data Security Standard v4.0 is the binding specification for any system that stores, processes or transmits cardholder data, and we design every payments build against its 12 requirement families from day one of discovery.
pcisecuritystandards.org
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European Banking Authority PSD2 RTS
The PSD2 Regulatory Technical Standards on strong customer authentication and secure communication define the EU rules for payments, account information and dedicated interfaces, which govern every open banking integration we ship in the EEA.
eba.europa.eu
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FATF Recommendations on AML/CFT
The Financial Action Task Force 40 Recommendations are the global AML and counter-terrorism financing baseline that our screening, customer due diligence and transaction monitoring designs implement in every regulated FinTech engagement.
fatf-gafi.org
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Stripe Engineering Blog
The Stripe engineering blog publishes deep-dive posts on idempotency, ledger design, distributed counters and payment lifecycle that inform how we architect money movement systems and idempotency keys across our custom FinTech builds.
stripe.com
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Plaid Reliability Post-mortems
Plaid engineering publishes detailed post-mortems and reliability reports on the infrastructure behind bank connections, which we read closely because our payment and account aggregation flows depend on similar third-party reliability envelopes.
plaid.com
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Bank for International Settlements CPMI Reports
The BIS Committee on Payments and Market Infrastructures publishes authoritative reports on cross-border payments, CBDC and fast payment systems, which inform every FinTech engagement touching international money movement or central bank rails.
bis.org
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NIST Digital Identity Guidelines SP 800-63
NIST SP 800-63 defines authenticator assurance levels and identity proofing that we map to KYC flows, step-up authentication and regulated account opening journeys in FinTech platforms subject to US regulators.
pages.nist.gov
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ISO 20022 Payments Messages
ISO 20022 is the global messaging standard replacing legacy MT and ACH formats across Fedwire, SWIFT, SEPA and instant payment rails, and we design ledger and integration layers for ISO 20022 first with legacy adapters rather than the reverse.
iso20022.org
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Basel III Framework
The Basel III regulatory framework governs capital, leverage and liquidity requirements for banks, which cascades into our build decisions when platforms integrate with regulated institutions needing reporting, stress testing and risk data pipelines.
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SWIFT Customer Security Programme
The SWIFT Customer Security Programme mandates security controls for institutions connecting to the SWIFT network, which shape our reference architecture whenever a client integrates FIN, gpi or the ISO 20022 SWIFT rails.
swift.com
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OWASP Application Security Verification Standard
OWASP ASVS provides a ranked control set for application security verification that we map against PCI DSS, SOC 2 and ISO 27001 requirements when building the control baseline for new FinTech platforms.
owasp.org
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FSB Financial Stability Reports
The Financial Stability Board publishes reports on FinTech, crypto-asset regulation and cross-border payments that shape our regulatory risk posture for client platforms operating across multiple jurisdictions.
fsb.org
- Compliance projects without a defined regulatory framework and jurisdiction
- KYC/AML builds without a sponsor bank or licensed entity taking responsibility
- Projects where the client wants to avoid regulation rather than comply with it
- "Build a compliance officer" projects (software supports compliance, it does not replace the officer)
Compliance and RegTech at Pharos Production at a glance
- RegTech systems: 12+ production compliance systems since 2018 (KYC/KYB, AML monitoring, regulatory reporting, sanctions screening, audit automation)
- Regulatory scope: FinCEN, FFIEC, FCA, MiCA, PSD2, GDPR, HIPAA, AML/CFT, sanctions (OFAC, EU, UN)
- Stack: Elixir/Phoenix, Python (FastAPI/Django), PostgreSQL with immutable event log, Kafka, AWS with VPC isolation
- Integrations: Sumsub, Onfido, Persona, Alloy, ComplyAdvantage, Chainalysis, TRM Labs, WorldCheck, Dow Jones Risk & Compliance
- Pricing: RegTech MVP $60,000-$180,000; full platform $180,000-$500,000+; retainers from $10,000/month
- Timeline: Discovery + regulatory framework 4-6 weeks; MVP 3-6 months; full platform 6-14 months with examiner walkthroughs
- Audit support: Examiner-ready audit trails, deterministic decision logging, evidence collection automation, SAR/CTR/STR filing support
- Honest scope: We recommend Sumsub/Alloy for early-stage and decline "avoid regulation" projects
Custom RegTech vs off-the-shelf platforms (Sumsub, Alloy, Actimize): which is better?
Custom RegTech gives you exact fit with your regulatory model, data residency and unit economics at scale, while off-the-shelf platforms (Sumsub, Onfido, Alloy, ComplyAdvantage, Actimize) ship in weeks with inherited compliance. According to a 2024 Thomson Reuters report, 74% of mid-market FinTech starts with off-the-shelf RegTech and roughly 25% migrates parts of their compliance stack to custom within 36 months as volume, jurisdiction complexity or cost makes the switch worth the engineering.
| Factor | Custom RegTech | Off-the-shelf platform |
|---|---|---|
| Regulatory fit | Exact fit; tuned to your jurisdictions and product model | Generic; may miss edge cases or force workarounds |
| Data residency | Your VPC, your region, your retention rules | Vendor regions; subject to vendor data flow |
| Cost at scale | Fixed engineering cost; marginal cost decreases with volume | Per-check billing scales linearly forever |
| Integration | Native integration with your ledger, transaction flow, audit systems | API/SDK; deep integration limited |
| Customization | Tailored rule engines, risk scoring, workflow routing | Pre-set rules; limited customization in most vendors |
| Time to MVP | 3-6 months for production-grade system | 1-4 weeks for basic integration |
| Vendor lock-in | None; portable to any infrastructure | Strong lock-in on data model, decision history, reports |
| Best fit | Scale-stage FinTech, complex jurisdictions, proprietary data, custom workflows | Early-stage FinTech, standard jurisdictions, rapid MVP |
Our RegTech engineering flow
Compliance projects follow Pharos Verified Delivery with regulatory-specific gates: discovery includes regulatory framework mapping and examiner-ready design; build includes deterministic decision logging plus immutable audit trails; production readiness covers examiner walkthrough simulations plus evidence collection automation; support includes quarterly regulatory change review and monthly compliance metric reviews.
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Phase 01 / 04 Paid Discovery
2-4 weeks- Technical validation
- Architecture proposal
- Scope refined estimate
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Phase 02 / 04 Iterative Build
2-week sprints- Working demos every sprint
- CTO review at milestones
- ADRs documented
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Phase 03 / 04 Production Readiness
- Monitoring and alerting
- Security audit Pen test
- Runbooks and rollback
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Phase 04 / 04 Support
Ongoing- Security patches
- Performance tuning
- 4h SLA response
Pharos Verified Delivery applied to 70+ production applications since 2013
RegTech systems running in production
Three RegTech engagements covering KYC, AML and regulatory reporting. Audit outcomes validated by client compliance teams.
Manual KYC review averaged 48 hours per applicant. 22% drop-off during the wait. Compliance team backed up with 200+ pending reviews. FCA exam findings on inconsistent decisioning.
Automated KYC pipeline with Sumsub integration, sanctions screening and risk-tier routing. 92% of applicants approved in under 5 minutes. Drop-off rate down to 7%. Compliance team handles only edge cases. Consistent audit trail for every decision.
Low-risk applicants auto-approve on the spot; medium-risk go to a 15-minute enhanced review flow; high-risk and PEP matches hit the compliance queue. Every decision is auditable with a full document and rule trail for regulators.
Rules-based AML monitoring generated 4,200 alerts per day. 97% were false positives. Compliance team of 8 drowning in noise. Real suspicious activity buried under alert fatigue.
ML-augmented transaction monitoring with risk scoring + graph analytics. Alert volume down 78% while catching 3x more truly suspicious patterns. Compliance team redeployed from alert triage to case investigation. SAR filings increased in quality measurably.
The ML layer does not replace rules — it prioritizes them. Hard rules still fire for sanctions and known patterns; the ML layer scores the rule hits by likelihood of being actual suspicious activity. High-score alerts get human attention first; low-score alerts are batch-reviewed.
Regulatory reports (SAR, CTR, 314(b)) assembled manually from 6 different systems each month. 3 full-time compliance analysts. Reports frequently filed late; errors cost $300K in remediation in the previous year.
Automated regulatory reporting engine pulling from the canonical ledger with examiner-ready audit trails. Report preparation time down from 11 days to 2 hours. Zero late filings. FinCEN audit passed with no findings.
We built the reporting engine as a deterministic read layer over the existing ledger — no custom data entry, no manual reconciliation. If the ledger is right, the report is right. Every report includes a diff from the previous period so examiners can trace deltas quickly.
Client names anonymized under NDA. Full case studies at /cases/.
When custom RegTech is not the answer
We decline roughly 30% of RFPs we receive. Forcing a bad fit costs both sides 3-6 months and damages outcomes. Here is how we think about scope:
- Projects where off-the-shelf RegTech (ComplyAdvantage, Alloy, Actimize) would cover 80% of needs
- Compliance projects without a defined regulatory framework and jurisdiction
- KYC/AML builds where the client has no sponsor bank or licensed entity
- Projects where the client wants to avoid regulation rather than comply with it
- "Build a compliance officer" projects (software supports compliance, it does not replace the officer)
For early-stage FinTech, off-the-shelf RegTech platforms (Sumsub, Onfido, ComplyAdvantage, Alloy, Actimize, ComplyCube) cover 80% of needs out of the box. Custom RegTech makes sense when: you need unique jurisdictional compliance not covered by a vendor, your scale makes per-check pricing dominate your P&L, you have proprietary data that must stay in-house, or you need to integrate compliance into a core banking system the vendor does not support. We have recommended Sumsub + Alloy over custom for many engagements.
Pharos RegTech portfolio
Pharos compliance and RegTech delivery portfolio observations, 2020-2026
Ranges we consistently see across 18+ RegTech engagements.
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Sub-500ms p99 on account-opening sanctions screening; sub-200ms p99 on pre-configured watchlist matches across cached sources.
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12-22% typical on hybrid rules plus ML screening; compared to 35-55% on rules-only baselines; tuned per customer risk appetite[3].
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14-24 weeks from discovery to production-ready screening and monitoring platform with audit trail and regulator-query runbook.
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Baseline 3-5 jurisdictions; additional jurisdictions onboarded via rule-pack pattern at 2-4 weeks per jurisdiction thereafter[12].
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50-70% reduction in regulator query and audit prep time versus manual evidence collection, via automated generation from immutable audit trail.
Compliance and RegTech outlook 2026-2027
Three shifts are reshaping compliance engineering.
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PEP, sanctions and adverse-media screening move from overnight batch to sub-second inline checks. FinTech platforms without real-time screening face customer abandonment at onboarding and regulatory scrutiny on latency[3].
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High-risk AI system classification, documentation and monitoring requirements arrive as binding EU regulation. RegTech platforms without AI Act readiness cannot serve EU institutional customers[2].
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Suspicious activity report generation shifts from rules-only to hybrid gradient-boosting plus rules. Teams without ML tier report higher false-positive rates and longer investigator queues[11].
Our four-dimension RegTech evaluation template
Every RegTech engagement we ship runs against the same four-dimension readiness evaluation before handover.
Production post-mortem
When a sanctions list sync lag caused 47 minutes of exposure
A RegTech platform we shipped in Q4 2024 pulled OFAC and EU sanctions list updates hourly. A source publication change caused the scheduled sync to fail silently for three consecutive runs before the monitoring alert fired on the fourth, creating a 47-minute window where screening used stale data. No matches were missed in retrospective replay; the lag was detected and corrected within one monitoring cycle.
Sanctions list sync monitoring now uses both freshness alarm and content-hash change detection. Stale-data fail-closed mode added: screening continues but flags every result for human review when source age exceeds 90 minutes. Added to standard production readiness checklist.
Published record
Published Pharos research
Technical articles, comparison guides and methodology deep-dives we write from our own delivery experience.
Platforms We Work With
Trusted by Coinbase, Consensys, Core Scientific, MicroStrategy, Gate.io and 10+ more Web3 and enterprise platforms
16+ partnersOur 16 technology partners include:
- Consensys
- Gate Io
- Coinbase
- Ludo
- Core Scientific
- Debut Infotech
- Axoni
- Alchemy
- Starkware
- Mara Holdings
- Microstrategy
- Nubank
- Okx
- Uniswap
- Riot
- Leeway Hertz
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Consensys
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Gate Io
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Coinbase
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Ludo
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Core Scientific
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Debut Infotech
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Axoni
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Alchemy
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Starkware
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Mara Holdings
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Microstrategy
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Nubank
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Okx
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Uniswap
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Riot
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Leeway Hertz
Compliance solutions we deliver
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KYC/AML platformsIdentity verification systems with document scanning, liveness detection, PEP/sanctions screening and ongoing monitoring. Integrated with Jumio, Onfido, Sumsub. -
Transaction monitoringReal-time transaction screening against risk rules and ML models. Suspicious activity reporting, case management and regulatory filing.
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Regulatory reporting systemsAutomated report generation for financial regulators. MiCA, GDPR, PSD2 and jurisdiction-specific compliance templates.
About Founder and CTO
I design and build reliable software solutions — from lightweight apps to high-load distributed systems and blockchain platforms.
PhD in Artificial Intelligence, MSc in Computer Science (with honors), MSc in Electronics & Precision Mechanics.
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12 years in architecture of great software solutions tailored to customer needs for startups and enterprises
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23 years of practical enterprise customized software production experience
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Lecturer at the National Kyiv Polytechnic University
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Doctor of Philosophy in Artificial Intelligence
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Master’s degree in Computer Science, completed with excellence
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Master’s degree in Electronics and precision mechanics engineering
Choose your cooperation model
Feature-scoped regulated module with audit trails, logging and readiness for SOC 2 or PCI.
Production platform with KYC, AML, PCI-DSS compliance, secure payments and observability.
Multi-region, multi-tenant platform with full compliance, fraud detection and 24/7 incident response.
Prices vary based on project scope, complexity, timeline and requirements. Contact us for a personalized estimate.
Or select the appropriate interaction model
Request staff augmentation
Need extra hands on your software project? Our developers can jump in at any stage – from architecture to auditing – and integrate seamlessly with your team to fill any technical gaps.
Hire dedicated experts
Whether you’re building from scratch or scaling fast, our engineers are ready to step in. You stay in control, and we handle the code.
Outsource your project
From first line to final audit, we handle the entire development process. We will deliver secure, production-ready software, while you can focus on your business.
Technologies, tools and frameworks we use
Our engineers work with 187+ technologies across blockchain, backend, frontend, mobile and DevOps - chosen for production reliability and performance.
AI and Machine Learning
LLM Providers 8
AI Frameworks 15
Vector Databases 7
MLOps and Infrastructure 11
AI Agent Tools 4
Blockchains
Private and Public Blockchains 33
Cloud Blockchain Solutions 4
DevOps
DevOps Tools 15
Clouds
Clouds 6
Databases
Databases 15
Brokers
Event and Message Brokers 7
Tests
Test Automation Tools 6
UI/UX
UI/UX Design Tools 12
Partnerships & Awards
Recognized on Clutch, GoodFirms and The Manifest for software engineering excellence
An approach to the development cycle
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Team Assembly
Our company starts and assembles an entire project specialists with the perfect blend of skills and experience to start the work.
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MVP
We’ll design, build, and launch your MVP, ensuring it meets the core requirements of your software solution.
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Production
We’ll create a complete software solution that is custom-made to meet your exact specifications.
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Ongoing
Continuous Support
Our company will be right there with you, keeping your software solution running smoothly, fixing issues, and rolling out updates.
FAQ
Quick answers to common questions about custom software development, pricing, process and technology.
Type to filter questions and answers. Use Topic to narrow the list.
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For early-stage FinTech, buy. Sumsub, Onfido, Alloy, ComplyAdvantage cover 80% of KYC/AML needs in weeks at moderate cost.
Build custom when: your scale makes per-check pricing dominate your P&L, you need jurisdictional compliance not covered by vendors, you have proprietary data that must stay in-house, or you need deep integration with a core system the vendor does not support. Typical crossover point: $5-10M monthly transaction volume.
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For identity verification we integrate Sumsub, Onfido, Persona, Jumio or ComplyCube depending on the client’s coverage and risk appetite. For business verification (KYB) we use Alloy, Middesk or Coris.
Sanctions screening via ComplyAdvantage, Dow Jones or WorldCheck. PEP screening via ComplyAdvantage or Refinitiv. All providers are integrated via Pharos-owned abstraction layer so providers can be swapped without rewriting the application.
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Layered approach: (1) deterministic rules for sanctioned parties, structuring patterns and hard compliance requirements; (2) risk scoring via gradient boosting models trained on historical alert quality; (3) graph analytics for network-level risk (counterparty risk, money mule detection). The ML layer prioritizes human attention - it does not replace the human case review.
All decisions are logged with the full rule firing history for examiner audit.
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Deterministic read layer over the client canonical ledger. SAR (Suspicious Activity Report), CTR (Currency Transaction Report), 314(b) information sharing, Form 8300 - all generated from ledger data without manual entry.
Every report includes a diff from the prior period so examiners can trace deltas quickly. We do not interpret regulatory requirements - the compliance officer owns that, the software enforces what the officer defines.
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Yes, with the client compliance officer driving. We build systems to be “examiner-ready” from the start: every compliance decision has a timestamp, rule identifier, officer identifier and full input snapshot.
Audit trails are immutable (PostgreSQL event log + append-only). We have walked clients through FinCEN, FCA and state-level examinations. Pharos is ISO 27001 certified so the infrastructure side passes audits cleanly.
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RegTech MVP 3-6 months: 4-6 weeks discovery + regulatory framework mapping, 10-16 weeks build (rule engine, integrations, audit trails, reporting), 4-6 weeks examiner walkthrough and evidence collection setup. Full platform with multi-jurisdiction support and ML augmentation runs 6-14 months.
Regulatory interpretation workshops with the client’s legal counsel are a critical-path item - budget at least 2-3 weeks of counsel time across the engagement.
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Yes. Travel rule integration via Notabene, Sumsub or Chainalysis KYT.
MiCA compliance design (token classification, issuer obligations, whitepaper publication, operating rules). On-chain analytics via Chainalysis or TRM Labs for sanctions screening on crypto addresses. We do not provide legal opinions on token classification - clients must engage qualified counsel before operating in regulated crypto markets.
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We decline projects where off-the-shelf covers 80% of needs, compliance work without a defined regulatory framework and jurisdiction, KYC/AML builds without a sponsor bank or licensed entity, and “avoid regulation” projects dressed up as compliance. We also decline “build a compliance officer” projects - software supports compliance officers, it does not replace them.
The Pharos takeaway on compliance and RegTech
RegTech rewards teams that treat regulation as code, not policy. Pharos ships compliance systems with rule-ID traceability, immutable audit trails and sub-second screening, and declines engagements where regulatory posture is an afterthought[11].
Book a 30-minute RegTech readiness call
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What happens next?
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Contact us
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Plan the Goals
After we chat about your goals and needs, we’ll craft a comprehensive proposal detailing the project scope, team, timeline and budget
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Sign the Contract
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Our offices
Headquarters in Las Vegas, Nevada. Engineering office in Kyiv, Ukraine.