Elias Afxentiou: Aim is to strengthen Prognosys Solutions' presence in Greece

The year 2025 is expected to be another challenging one for the RegTech sector, with several significant changes on the horizon, according to Elias Afxentiou, CEO of Prognosys Solutions.

In an interview with InBusinessNews as part of the "IN Business Forecasting 2025" series, Afxentiou notes that technological advancements have revolutionised the industry, emphasising that in an ever-evolving environment, it is natural to observe instances of "over-regulation".

"Although this often creates additional pressure for businesses, for us, it presents an opportunity," he states, adding that in a constantly changing sector, staying one step ahead is crucial to the success of Prognosys Solutions.

To this end, Afxentiou says that the company’s key priority for the upcoming year will be to effectively manage the anticipated growth while remaining ahead of industry developments.

A fundamental pillar of the company's growth strategy and a primary objective, according to the CEO, is to strengthen Prognosys Solutions' presence in Greece, leveraging every opportunity that aligns with the company’s vision for the future.

Commenting on the trend of mergers and acquisitions, Afxentiou points out that approximately 300 deals take place annually in the RegTech sector globally, but only a few involve Cypriot companies.

Nevertheless, he says there is growing interest from abroad, mainly from investment funds and international companies that are analysing the Cypriot market and approaching local businesses to identify collaboration opportunities.

How do you estimate your sector will perform in 2025? Do you have any concerns?

The 2008 financial crisis highlighted the need for greater transparency and control in the financial sector. Since then, authorities have been constantly seeking ways to prevent a similar crisis while also better preparing for any eventuality.

It is worth mentioning that risks related to money laundering and terrorist financing continue to rise, a fact confirmed by the Basel AML Index.

At the same time, technological advancements have revolutionised our industry. Technologies such as blockchain, distributed networks, and artificial intelligence are radically transforming the landscape, creating both new opportunities and challenges.

New products, such as cryptocurrencies and electronic money, are gaining increasing significance.

In this constantly evolving environment, it is natural to observe instances of “over-regulation.” Although this often creates additional pressure for businesses, for us, it presents an opportunity.

The growing demand for specialised products and services that help organisations comply with regulatory requirements is driving continuous growth in demand for our solutions, and we expect this trend to continue in 2025.

However, as “over-regulation” increases, it becomes increasingly difficult for organisations to meet the requirements and for authorities to process the available data effectively in order to make informed decisions.

This dynamic presents challenges but also unique opportunities for us to provide real value to the market.

Another challenging year
What are the major trends/changes you anticipate in your sector, and what are the most significant challenges?

The year 2025 is expected to be another challenging one, with several significant changes on the horizon. The most notable of these include:

1. CRR III / CRD VI Banking Package: Based on the Basel III framework, the CRR III / CRD VI package is one of the most comprehensive regulations set to take effect in 2025 (initially published in mid-2024). Its objective is to enhance the financial stability and resilience of banks by updating capital requirements, risk assessments, and reporting obligations within the EU.
2. Digital Operational Resilience Act (DORA): Although DORA was enacted earlier, it will be enforced starting January 17, 2025. This regulation sets higher standards for the operational resilience of financial institutions in the IT sector, focusing on cybersecurity and data protection.
3. Payment Services Directive (PSD3): PSD3 tightens customer identification and information-sharing standards, promoting secure data exchange between banks, payment service providers, and third parties. Its goal is to make financial services more secure and accessible across EU member states by 2026.
4. Sustainable Finance Disclosure Regulation (SFDR) and ESG Risks: The SFDR, introduced in 2021, requires all financial institutions, market participants, and financial advisors to disclose information regarding the sustainability of their investment products.
5. Anti-Money Laundering Authority (AMLA) Regulation: This regulation provides for the establishment of a European Anti-Money Laundering Authority, which will oversee high-risk financial entities within the EU and harmonise AML standards across the region.

In addition to addressing these issues, it is important to note that progress is also expected in other upcoming regulations, such as BIRD/IREF, MiCAR, and DAC8.

Mergers and acquisitions

A strong trend that appears to be taking root in the Cypriot business landscape is that of mergers and acquisitions. Will we see this trend pick up in your sector as well?

Mergers and acquisitions have been a global phenomenon on the rise over the past decade, largely due to current economic conditions.

In the RegTech sector, we observe approximately 300 deals annually on a global scale, but only a few of these involve Cypriot companies. This is understandable, considering the size and scope of local businesses in the industry.

Nevertheless, there is growing interest from abroad, primarily from investment funds and international companies that are analysing the Cypriot market and approaching local businesses to identify collaboration opportunities.

While it is likely that we will see some of these deals materialise, I would personally be more interested in seeing agreements between local RegTech companies. Such collaborations could strengthen their market position and expand their portfolios.

However, this seems less likely, mainly due to the nature and "culture" of local businesses, which largely remain family-run and have yet to mature into a more corporate structure.

What can we expect in terms of your organisation’s plans and growth strategy for 2025? What steps are you planning to take in this direction?

The year 2025 is expected to bring numerous challenges, but also opportunities. Our main priority will be to effectively manage the anticipated growth while staying ahead of industry developments.

In a constantly evolving sector, staying one step ahead is crucial to the success of Prognosys Solutions. Within this framework, we will continue to focus on strengthening our presence in the Greek market.

We consider it a key component of our growth strategy, and our goal is to further solidify our position there by seizing every opportunity that aligns with our vision for the future.