There’s an old sardine story that investors like to trot out when markets seem untethered from reality. First immortalised in Seth Klarman’s Margin of Safety, it’s about a speculative frenzy that gripped sardine trading in Monterey, California, after the fish mysteriously vanished from their usual waters. Prices for canned sardines soared as they were traded as a kind of commodity. 

One day, a curious (or perhaps hungry) trader decided to eat his prized possession. The result? He promptly fell ill.  When he complained to the seller he responded, “You don’t understand. These are not eating sardines, they are trading sardines.” 

It’s a tale as old as markets themselves, encapsulating the dangers of speculation divorced from intrinsic value. And it’s a parable that feels especially pertinent in today’s tech-fuelled financial world, particularly in RegTech, the booming sector offering technology-driven solutions for regulatory compliance and risk management

The sardine test for RegTech 

Regulatory technology, or RegTech, has become a key player in the modern financial landscape, promising to help companies navigate a sea of regulations, with often choppy conditions, that govern industries as diverse as banking, insurance, and cryptocurrency. With some market analysts predicting a surge from $17 billion in 2023 to over $85 billion by 2032, the sector is hot property for investors and innovators alike. 

Yet, like the trading sardines of Monterey, not every RegTech solution delivers the value it promises. For every practical tool that helps businesses stay compliant, there’s a flashier, more speculative product that’s high on hype but low on usability. Distinguishing between these two, between the trading sardines and the eating sardines, has never been more important. 

Corlytics is an eating sardines pioneer 

One company that has firmly planted itself in the ‘eating sardines’ camp is Corlytics, a Dublin based RegTech firm that has grown from strength to strength by focusing on substance over speculation. 

Corlytics has carved out a niche as a leader in regulatory risk intelligence, using data analytics to help organisations understand, monitor, and manage compliance risks. Its growth trajectory is a case study in how to succeed in a sector filled with both opportunity and risk. 

In 2024, Corlytics received a significant investment from Verdane, a Nordic growth equity firm, enabling it to expand globally and deepen its technological capabilities. Strategic acquisitions of ING SparQ, Clausematch, and Deloitte’s RegTech platform further bolstered its offering, transforming it into an end-to-end compliance solution provider. 

The firm’s accolades are piling up, too. Named a 2025 RegTech100 company, Corlytics is increasingly recognised as one of the most innovative players in the field, a reputation earned not through flashy marketing but by delivering solutions that work. 

RegTech’s growing relevance 

The broader RegTech industry is flourishing against a backdrop of mounting regulatory complexity. Legislative and regulatory bodies are imposing stricter standards on everything from anti-money laundering (AML) to environmental, social, and governance (ESG) compliance. Financial penalties for non-compliance have skyrocketed, making effective compliance not just a regulatory requirement but a business imperative. 

But with rapid growth comes a surge of new entrants to the market.  Corlytics stands apart by focusing on practical applications. Its solutions, developed in collaboration with regulators, are designed to anticipate and mitigate compliance risks. This isn’t about making a quick profit or jumping on the latest tech trend, it’s about building solutions that stand the test of time. 

Lessons for investors and businesses 

The sardine parable offers a simple but powerful test for evaluating RegTech solutions: are they built for real-world use, or are they merely speculative bets on future potential? Obviously, for investors and businesses alike, the distinction is crucial. 

Intrinsic value 

Clearly, just as eating sardines must be edible, a RegTech solution should address real compliance challenges. Solutions that streamline processes, reduce costs, and enhance risk management are worth their weight in gold. 

Proven track record 

Companies like Corlytics, with a history of measurable success, are the ones to watch. Undoubtedly, A track record of delivering results speaks louder than any pitch deck filled with jargon. 

Regulatory collaboration 

Effective RegTech firms work closely with regulators to ensure their solutions are practical and aligned with current standards. This collaboration builds trust and ensures long-term viability. 

Sustainability 

However, the most valuable RegTech solutions aren’t just designed to solve today’s problems, they’re adaptable enough to handle tomorrow’s challenges. 

The future of RegTech 

With the global RegTech market expected by some analysts to grow at a compound annual growth rate of 23%, the sector is brimming with potential. But as the sardine story reminds us, not all growth is equal. The companies that will thrive are those that focus on substance, not speculation. 

Corlytics is a prime example of this philosophy in action. By prioritising real world applications, regulatory collaboration, and sustainable growth, it has positioned itself as a trusted partner for organisations navigating the never ending complexities of compliance. 

So, as the RegTech industry matures, the lesson of the sardine parable will remain relevant: in a world full of trading sardines, it’s the eating sardines that truly matter. The challenge for investors, businesses and innovators alike, is to tell the difference.