IRIS Regtech Solutions Ltd Management Discussions

Global Economy

The global economy demonstrated notable steadiness in 2025, outperforming earlier expectations despite elevated geopolitical tensions, tightening trade measures and persistent macroeconomic uncertainty. According to the International Monetary Fund (IMF), global GDP stood at 3.4% in 2025, supported by strong technology-led investments, accommodative financial conditions and fiscal support across major economies. Growth momentum was further aided by continued investments in digital infrastructure, artificial intelligence and advanced technologies, which emerged as key drivers of productivity and capital flows across global markets.

However, by 2026, the global outlook will have become increasingly complex following the outbreak of the Middle East conflict.

The escalation has introduced fresh supply side disruptions, heightened volatility in energy markets, and increased uncertainty across global trade and financial systems. IMF expects global growth to slow down to 3.1% in 2026, reflecting the impact of higher commodity prices, disrupted trade routes, and weakening business sentiment across several regions.

Global trade patterns are undergoing significant realignment as economies diversify supply chains and strengthen regional partnerships amid increasing geopolitical fragmentation.

Moving forward, advanced economies are expected to grow 1.8% in 2026 as elevated energy prices, weaker industrial output and cautious consumer spending continue to weigh on economic activity. While the United States is projected to maintain relatively stable growth supported by fiscal measures and easing monetary conditions, economic momentum across Europe remains constrained due to manufacturing weakness and continued energy market pressures.

Emerging markets and developing economies are expected to remain the primary engine of global growth, with projected expansion of 3.9% in 2026. India is expected to remain the fastest growing global economy, supported by resilient domestic demand,

infrastructure investments, and strong digital adoption. China, while continuing to contribute meaningfully to global output, is expected to witness moderate growth amid structural changes in real estate.

Looking ahead, the global outlook remains cautiously balanced between near-term geopolitical and macroeconomic challenges and the long-term potential of digital transformation and technology-led productivity gains. While downside risks linked to geopolitical escalation, energy market volatility and trade fragmentation persist, continued investments in innovation, digital infrastructure and AI capabilities are expected to support medium-term global growth and economic resilience.

Indian Economy

The Indian economy is expected to grow 7.4% in FY26, remaining the fastest growing major economy for the 4^th consecutive year, demonstrating resilience amid geopolitical tension, supply chain realignments, and commodity market volatility. This growth will be achieved on the back of robust domestic demand, sustained public capital expenditure, and strong service sector activity.

Indias services exports touched $421.3 billion in FY26, surpassing the $418.3 billion estimated earlier, resulting in a record $863.1 billion in total goods and services exports. Services exports increased 8.7% over $387.55 billion in FY25. Overall exports rose 4.6% from $825.26 billion in FY25. High-frequency indicators, ranging from GST collections and manufacturing output to air travel and digital payments, have pointed to steady momentum.

However, going ahead, the GDP growth is projected at 6.8-7.2% for FY27, due to persistent energy disruptions triggered by the Middle East conflict, inflation and financial conditions. At the same time, inflation is projected to rise to about 5.1% from 2% in the previous fiscal, reflecting second-round effects of higher energy, freight and input costs, though it will still be within the RBIs comfort band.

However, risks related to geopolitical conflicts, volatility in global energy prices, disruptions to trade routes and evolving global monetary conditions remain key monitorables. In addition, forecasts around potential El Nino conditions and uneven weather patterns could impact agricultural output, food inflation, and rural demand in the near term.

Regulatory Technology (RegTech) Industry Overview

The global regulatory landscape is undergoing a structural shift as financial institutions, enterprises and regulators navigate an increasingly complex environment characterised by digitalisation, cross-border operations, data proliferation, and evolving compliance expectations. In this environment, Regulatory Technology (RegTech) has emerged as a critical enabler of compliance, transparency, operational resilience and risk management, helping organisations manage growing regulatory obligations through automation, analytics and intelligent workflows. What began as a niche compliance support function has today evolved into a strategic industry, focused on improving transparency, operational efficiency, risk management and regulatory responsiveness across global financial ecosystems.

Expanding Global RegTech Market

The RegTech industry has witnessed strong global expansion over the past few years, driven by rising compliance costs, increasing financial crime risk, rapid digital transformation and growing regulatory scrutiny across sectors. According to Fortune Business Insights, the global RegTech market was valued at approximately USD 19.06 billion in 2025 and is expected to reach USD 105.23 billion by 2034, exhibiting a CAGR of 20%.

Geography-wise RegTech Market Share 2025

North America	30.3%
Asia Pacific	24.7%
Europe	30.7%
Latin America	5.4%
Middle East and Africa	8.9%

The industry has witnessed sustained investor confidence, particularly in AI-enabled compliance, digital reporting and risk analytics platforms. The increasing demand for automation, real-time monitoring and integrated governance solutions continues to create long-term structural opportunities for RegTech providers globally.

Key Drivers Accelerating RegTech Adoption

Government Encouragement for Implementing Regulatory Tech Solutions

Governments across the globe are encouraging enterprises to implement regulatory technology solutions. Rapid digitalisation is creating challenges for government agencies in securing data and helping businesses comply with regulations efficiently.

Increasing Regulatory Complexity and Multijurisdiction Compliance

The regulatory environment has become significantly more dynamic and interconnected over the past decade. Organisations today operate across multiple jurisdictions governed by evolving regulatory frameworks related to AML compliance, cybersecurity, operational resilience, ESG reporting, financial disclosures, and data privacy. Regulatory authorities are also increasing the frequency, granularity, and standardisation of reporting requirements to improve transparency and systemic oversight.

As compliance obligations continue to expand, enterprises are increasingly shifting towards automated, scalable RegTech platforms that manage complex regulatory workflows while reducing manual intervention and operational inefficiencies. This is particularly relevant for multinational organisations that need to harmonise reporting standards and compliance practices across geographies.

Transition Towards Real-time Compliance and Continuous Monitoring

The regulatory ecosystem is gradually moving away from periodic and retrospective reporting towards real -time compliance supervision and a continuous monitoring framework.

Regulators and financial institutions increasingly require systems capable of delivering:

• automated reporting

• intelligent validation

• exception monitoring

• predictive risk identification

• real-time visibility into compliance metrics

This shift is significantly increasing demand for integrated compliance infrastructure capable of supporting proactive governance and faster regulatory response mechanisms. Real-time monitoring capabilities are becoming particularly important in sectors such as banking, insurance and capital markets where reporting delays or inaccuracies can create significant operational and regulatory risks.

Artificial Intelligence Reshaping the Compliance Landscape

Organisations are increasingly leveraging AI-enabled systems to automate regulatory interpretation, analyse large volumes of structured and unstructured data, detect anomalies and improve decision-making processes across compliance workflows.

Artificial Intelligence (AI), Machine Learning (ML), Natural Language Processing (NLP), predictive analytics among others are enabling organisations to strengthen regulatory intelligence, transaction monitoring, fraud detection, risk analytics and reporting automation.

According to The Global State of RegTech 2026, AI agents and intelligent automation platforms are expected to witness among the highest investment priorities within compliance functions during 2026. 44% of financial institutions expect AI agents to be among the highest areas of compliance investment and 60% of RegTech vendors expect AI-led compliance solutions to attract the strongest technology spending in 2026.

Growing Adoption of SaaS-based Compliance Platforms

Cloud native SaaS delivery models are playing an increasingly important role in the evolution of the RegTech ecosystem. Enterprises are increasingly preferring SaaS-based compliance platforms due to their scalability, flexibility and ability to support dynamic regulatory updates across jurisdictions.

Unlike traditional on-premises compliance infrastructure, SaaS- based RegTech platforms enable faster development cycles, lower implementation costs, API-driven integration, remote accessibility and continuous platform upgrades.

Key Segments within the RegTech Ecosystem

Regulatory Reporting and Disclosure Management

Regulatory reporting remains one of the largest and fastest growing segments within RegTech. The increasing adoption of structured and machine-readable reporting standards such as XBRL, combined with growing disclosure obligations, is significantly expanding demand for automated reporting and disclosure management platforms. Enterprise and financial institutions are increasingly deploying RegTech to manage supervisory reporting, structure disclosures, financial reporting workflows, audit requirements, and multi-jurisdiction filings.

As regulators intensify focus on transparency, data quality and reporting accuracy, intelligent reporting infrastructure is becoming increasingly central to enterprise governance frameworks.

Financial Crime Compliance

Financial institutions continue to increase investments in AI- enabled compliance solutions focused on anti-money laundering (AML), fraud prevention, sanctions screening and identity verification. The rapid growth of digital transactions, evolving cyber threats and increasing regulatory scrutiny around financial crime are accelerating adoption of intelligent monitoring and risk management platforms globally.

Cybersecurity and Operational Resilience

The increasing digitalisation of the financial ecosystem has significantly heightened focus on cybersecurity governance and operational resilience. Regulators globally are strengthening expectations around technology risk management, data protection, and third-party oversight.

As a result, RegTech platforms are increasingly supporting organisations in areas such as cybersecurity compliance, digital operational resilience, enterprise risk visibility, AI governance and data privacy management.

Rising Strategic Importance of ESG RegTech

Environmental, Social and Governance (ESG) reporting has emerged as one of the most important growth opportunities within the broader RegTech ecosystem. Sustainability disclosures are rapidly transitioning from voluntary initiatives towards structured and increasingly mandatory reporting frameworks across global markets.

Governments and regulatory bodies are introducing more standardised disclosures through frameworks such as the Corporate Sustainability Reporting Directive (CSRD), International Sustainability Standards Board (ISSB) standards, and climate-risk disclosure regulations. As ESG reporting becomes more data intensive and multidimensional, enterprises are increasingly adopting technology-enabled disclosure management, validation, adaptability, and multi-framework reporting.

Investor expectations around sustainability transparency are also increasing significantly. Businesses are increasingly recognising that ESG disclosures are not only compliance requirements, but also important drivers of stakeholder trust, capital access and long-term enterprise value creation. This is expected to sustain strong and consistent demand for ESG-focused RegTech solutions globally.

Key Challenges Facing the Industry

Despite strong long-term growth prospects, the RegTech industry continues to face several operational and structural challenges.

Integration with Legacy Infrastructure

Many large financial institutions continue to operate on fragmented legacy systems, making integration of modern compliance platforms operationally complex and resource intensive. Integration challenges often impact implementation timelines, interoperability and enterprise-wide scalability.

Data Quality and Interoperability Challenges

As regulatory ecosystems become increasingly data- driven, organisations continue to face challenges related to inconsistent data quality, fragmented information systems and multi-jurisdictional reporting alignment. These issues can impact reporting accuracy, automation efficiency and regulatory responsiveness.

AI Governance and Explainability Risks

The growing adoption of AI within compliance environments has increased focus on explainability, transparency, governance controls and data privacy. Regulators and enterprises are increasingly emphasising the importance of auditable and responsive AI systems, particularly in high-risk compliance workflows where automated decisions require clear accountability and traceability.

Industry Outlook

The long-term outlook of RegTech industry is highly favourable, supported by increasing regulatory complexity, accelerating digital transformation, expansion of ESG disclosure mandates, rising cybersecurity risks, and growing adoption of AI-enabled compliance infrastructure.

As financial and regulatory ecosystems become increasingly interconnected, data-intensive and intelligence-driven, RegTech is expected to evolve from a compliance support function into a foundational layer supporting governance, transparency, operational resilience and trusted decision-making across global enterprise ecosystems.

RegTech Industry in India

Growth of the Indian RegTech Market

India is emerging as one of the fastest growing RegTech markets globally, supported by rapid fintech expansion, increasing digital transactions, and growing regulatory digitalisation initiatives.

According to industry estimates, the Indian RegTech market is projected to grow at a CAGR of 30.58% between FY25 to FY32, from nearly USD 628 million in FY24 to over USD 5.3 billion by FY32.

Indias RegTech industry is driven by the expansion of digital financial services, evolving regulatory frameworks and increasing adoption of AI-led compliance infrastructure. As Indias financial ecosystem becomes increasingly digital, interconnected and data intensive, financial institutions, fintechs, NBFCs, insurers and enterprises are accelerating investments in technology-enabled compliance, governance and risk management systems.

Increasing Compliance Requirements across Financial Services

Regulatory authorities, including the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI) are increasing oversight across areas such as digital lending, operational resilience, asset-liability mismatch compliance, cybersecurity and consumer protection among others. This is increasing the need for scalable and automated compliance management systems across banks, NBFCs, insurers and fintech companies.

Expansion of Digital Payments and Fintech Ecosystems

Indias rapidly growing digital payments infrastructure, led by UPI and digital banking adoption, has significantly increased transaction volumes and data intensity across the financial ecosystem. As digital financial services expand, organisations are increasingly investing in RegTech platforms to improve transaction monitoring, fraud detection and real time compliance capabilities.

Rising Cybersecurity and Fraud Risks

The increasing digitalisation of financial services has increased the exposure to cyber threats, data breaches and financial fraud. This is driving demand for AI-enabled monitoring systems capable of identifying anomalies, detecting suspicious transactions, and improving enterprise-wide visibility.

Growing Data Privacy and Governance Obligations

The implementation of the Digital Personal Data Protection (DPDP) Act and increasing focus on data governance are compelling organisations to strengthen compliance with data handling, privacy management and customer consent frameworks. Enterprises are increasingly adopting technology-led governance platforms to improve transparency and regulatory readiness.

AI-led Compliance Automation and Intelligent Monitoring

Financial institutions and fintech companies are increasingly leveraging AI-enabled systems for various functions, including transaction monitoring, fraud detection, automated KYC verification, risk analytics, compliance monitoring and regulatory reporting automation. According to industry studies, AI adoption is expected to significantly improve operational efficiency, fraud prevention and compliance responsiveness across Indias banking and financial services. RBI studies indicate that Generative AI could improve banking operational efficiency by nearly 46% over the long term through automation and intelligent decisionmaking capabilities.

AI-enabled RegTech solutions are helping organisations transition from reactive compliance management towards predictive and real-time risk monitoring.

Regulatory Push and Accelerating Adoption

The Indian RegTech industry is strongly influenced by regulatory- led digitalisation and supervisory modernisation initiatives. RBIs regulatory sandbox initiatives, SEBIs advanced market surveillance frameworks, and increasing digitalisation of supervisory reporting are accelerating the adoption of intelligence compliance technologies across financial institutions. The RBI has also intensified its focus on responsible AI adoption within the financial sector through the FREE-AI framework, which outlines principles for ethical and risk-aware AI deployment across regulated entities.

SupTech Industry

SupTech refers to the use of innovative technologies by supervisory authorities and regulators to improve the efficiency, agility and effectiveness of supervision, surveillance and regulatory oversight. While RegTech focuses on helping regulated entities manage compliance obligations, SupTech is aimed at strengthening the capabilities of regulators themselves through intelligent and data- driven supervision.

According to the Cambridge SupTech Lab, SupTech is increasingly evolving into a core pillar of modern, accountable and future-ready financial supervision. Regulators are increasingly investing in technologies that support real-time monitoring, automated data aggregation, and intelligence-led supervision.

SupTech Growth Drivers

Increasing Complexity of Financial Ecosystem

Financial systems are becoming increasingly interconnected, digital and data intensive with rapid growth in fintech, embedded finance, digital assets, cross-border payments, and AI-enabled financial services. Traditional supervisory modules based on periodic reporting and manual reviews are becoming increasingly inadequate in managing the scale and speed of modern financial activity.

As a result, regulators are increasingly investing in SupTech infrastructure capable of supporting real-time monitoring, automated data aggregation and intelligence-driven supervision. SupTech solutions are helping authorities improve risk visibility, strengthen financial stability oversight, and identify emerging vulnerabilities more efficiently.

Growing Adoption of AI and Advanced Analytics

AI is emerging as one of the most transformative forces within the SupTech ecosystem. Supervisory authorities globally are increasingly leveraging AI-enabled systems for market surveillance, anomaly detection, AML supervision, risk assessment among others.

According to FINMA, AI represents a fundamental shift in how supervisors interact with data and make decisions with modern financial systems. Regulators are increasingly exploring Generative AI and machine learning to improve supervisory efficiency and automate large scale analytical processes.

Shift Towards Data-Driven and Continuous Supervision

Global supervisory frameworks are gradually evolving from retrospective and periodic supervision towards continuous, adaptive, and risk-aligned oversight models. This transition is significantly increasing the demand for a structured data ecosystem, interoperable reporting frameworks and cloud- native supervisory infrastructure.

According to the World Economic Forum, strong data governance and real-time supervisory intelligence are becoming foundational to the next phase of SupTech evolution.

Key Challenges

• Integration with fragmented and legacy supervisory infrastructure remains a significant operational challenge for many regulators.

• Data quality, interoperability and inconsistent reporting standards continue to impact effective implementation of SupTech systems.

• Increasing adoption of AI has heightened concerns around explainability, transparency, governance controls and algorithmic accountability within supervisory environments.

• Supervisory authorities globally continue to face talent gaps across AI, advanced analytics, cybersecurity, and digital risk management domains.

• Budgetary and institutional capacity constraints remain key barriers for several regulators, particularly across emerging markets.

Industry Outlook

The convergence of AI, predictive analytics, structured data ecosystems and cloud-native supervisory platforms is expected to fundamentally reshape the future of financial supervision.

The long-term outlook for the global SupTech industry remains highly favourable as regulators accelerate investments in AI- enabled supervision, real-time monitoring, and intelligent regulatory infrastructure.

As regulatory ecosystems become increasingly interconnected and data-driven, SupTech is expected to evolve into a foundational layer supporting financial stability, transparency, operational resilience and trusted digital financial systems globally.

SupTech Industry in India

In recent years, Indian regulatory authorities have accelerated the adoption of Supervisory Technology (SupTech) solutions to strengthen oversight across the countrys rapidly expanding digital financial ecosystem. The RBI has increasingly focused on technology-driven and real-time supervision frameworks to improve monitoring of banks, NBFCs, and digital financial institutions amid rising digital transactions, cyber risks and financial innovation.

DAKSH (Databank, Analytical, and Knowledge-sharing Supervisory Hub) is an advanced supervisory monitoring system developed by the RBI in 2023. It is a web-based, end- to-end supervisory workflow application, designed to improve compliance monitoring, automate supervisory processes and tighten regulatory oversight across supervised entities. The platform enables focused compliance tracking, inspection management and supervisory analytics for banks and N BFCs.

The RBI is also working on introducing AI-enabled supervision and responsible AI governance. It released FREE-AI (Framework for Responsible and Ethical Enablement of Artificial Intelligence) in 2025. The framework proposes a structured roadmap for responsible AI adoption across Indias financial sector and includes recommendations related to supervisory analytics, AI governance, digital infrastructure and risk monitoring.

In parallel, Indian regulators are increasingly exploring AI-driven supervisory applications such as fraud analytics, predictive risk monitoring, facial-recognition-based prevention systems, and automated compliance validation tools to improve cybersecurity and operational resilience across financial markets.

Company Overview

IRIS RegTech Solutions, formerly known as IRIS Business Services, is a leading Regulatory Technology (RegTech) company that helps regulators, financial institutions and enterprises navigate an increasingly complex reporting and compliance landscape. Headquartered in Navi Mumbai, India, with a presence across key global markets, the company provides technology platforms that enable the collection, validation, analysis and submission of regulatory, financial and sustainability data. The companys existing SupTech platform is being expanded to offer additional features to enable lifecycle management of the SupTech function. The companys RegTech offering for enterprises is now enabling automated report creation and authoring features for both financial and nonfinancial domains (such as ESG).

Leveraging expertise in global reporting standards and structured data frameworks, IRIS empowers stakeholders to collect, validate, analyse and report information with accuracy, transparency and speed. As the regulatory environment becomes increasingly digital and data-centric, the company remains well positioned to support the growing demand for trusted reporting, intelligent supervision and actionable insights.

Growth Drivers

Expanding Global Regulatory Digitisation

Regulators and supervisory authorities globally are increasingly transitioning towards digital, data-driven, and real-time supervisory systems. Growing focus on structured reporting, automated validation and integrated analytics is accelerating demand for scalable SupTech platforms. IRIS, with deployment across 55 countries and 30+ regulators and exchanges, is well positioned to benefit from this structural shift.

Increasing Adoption of AI-enabled Supervision

Financial regulators are increasingly adopting AI, automation and predictive analytics to strengthen supervisory efficiency, fraud detection and risk monitoring capabilities. IRIS has integrated AI-enabled functionalities such as automated data extraction, anomaly detection and predictive insights across its SupTech platforms, positioning the company to benefit from the transformation towards intelligent supervision frameworks.

Growing ESG and Sustainability Reporting Requirements

The rapid evolution of ESG disclosure regulations and sustainability reporting frameworks is creating significant opportunities within enterprise reporting and disclosure management. IRIS CARBONs expanding ESG capabilities, including sustainability reporting, carbon accounting and XBRL- enabled disclosures, position the company favourably to address increasing global demand for structured ESG reporting solutions.

The AI-Led Shift in Disclosure Management

Corporate reporting is becoming more structured, data- driven and tightly governed, as enterprises move away from fragmented, manual workflows towards integrated platforms that unify authoring, data, and compliance in one place. Alongside this, organisations are increasingly turning to AI — not only to draft reports, but to build intelligent controls that review, check and validate disclosures for accuracy and compliance before they are filed. IRIS CARBONs AI-powered Disclosure Management platform is built for this shift.

Internal Control Systems and Adequacies

The Companys internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with, and pending issues are addressed promptly. The audit committee reviews reports presented by the internal auditors on a routine basis. The committee makes note of the audit observations and takes corrective actions, if necessary. It maintains constant dialogue with statutory and internal auditors to ensure that internal control systems are operating effectively. Human resources / industrial relations, including the number of people employed Your Company provides regular training to employees to improve skills. Your Company has put in place a performance appraisal system that covers all employees. Your Company had 552 resources as on March 31, 2026.

Key Financial Ratios

Analytical Ratios

Particulars	Numerator	Denominator	Unit	March 31, 2026	March 31, 2025
Current Ratio	Current Assets	Current Liabilities	In times	3.52	2.43
Debt-Equity Ratio	Total Debt	Shareholders Equity	In times	0.01	0.05
Debt Service Coverage Ratio	Earnings available for debt service	Debt Service	In times	112.46	54.72
Trade Receivables Turnover Ratio	Revenue	Average Trade Receivable	In times	4.51	4.23
Trade Payables Turnover Ratio	Purchases of services and otherexpenses	Average Trade Payables	In times	16.63	13.16
Net Capital Turnover Ratio	Revenue	Current Assets - Current Liabilities	In times	1.10	1.82
Net Profit Ratio	Net Profit	Total Revenue	In percentage	10.25%	12.17%
Return on Capital Employed	Earning before interest and taxes	Net worth+deferred tax liabilities + Lease Liabilities	In percentage	8.81%	25.92%
Return on Equity	Net Profits after taxes	Net worth	In percentage	7.06%	17.96%

Detailed explanation for significant changes in sector-specific key financial ratios and changes in Return on Net Worth:

r Ratio	Numerator	Denominator	Current Period	Previous Period	% Variance	Reason for variance
Debt-Equity Ratio	100	20,073	0.01	0.05	(89%)	Due to decrease in borrowing and increase in equity capital
Debt Service Coverage Ratio	1,982	18	112.46	54.72	106%	Due to increase in Earning Before Interest, Depreciation and Tax
Net Capital Turnover Ratio	12,850	11,638	1.10	1.82	(39%)	Due to increase in Net Working Capital
Return on Capital Employed	1,773	20,139	8.81%	25.92%	(66%)	Due to enlarged Net Worth following the one-time gain on divestment of GST ASP business
Return on Equity	1,416	20,074	7.06%	17.96%	(61%)	Due to enlarged Net Worth following the one-time gain on divestment of GST ASP business

Cautionary Statement

The Management Discussion and Analysis report containing your Companys objectives, projections, estimates and expectations may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include cyclical demand and pricing in the Companys principal markets, changes in governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.