Demystifying RegTech at the FinTechNZ Hui
Regulatory Technology (RegTech) is the use of technology to better achieve regulatory objectives. RegTech has two key use cases. The first one is RegTech for regulators (also referred to as Supervisory Technology or SupTech) which involves use of innovative technology to streamline regulatory functions ranging from design of legislation to supervision and enforcement. The other is RegTech for industry, applying cutting-edge technology in order to lower the regulatory compliance burden. Both are undergoing rapid digital transformation globally.
The RegTech stream at the FinTech Hui Taumata provides a platform for collaboration for regulators, regulated entities, institutions and Government to address supervisory and regulatory compliance challenges within the financial ecosystem, and how we can leverage technology and community to simplify the understanding and application of legislation. It also provides an opportunity to explore where there might be gaps or opportunities to improve regulatory infrastructure, design or governance.
It’s crucial for businesses to understand what RegTech is, and why they should be building a RegTech strategy into their processes. At heart, RegTech is about using resources more efficiently. The regulatory landscape is changing quicker than humans and manual solutions can keep up – technology is required to keep businesses and customers protected.
The pace of financial services and technological innovations, the emerging threats and consumer harms, and the associated regulatory considerations share a lot in common across jurisdictions. Data volumes continue to grow exponentially posing additional challenges for supervisory, regulatory compliance and enforcement objectives. Financial services industry is grappling with skills challenges in the areas of Data Analytics, Cybersecurity, Artificial Intelligence (AI), and Machine Learning (ML).
Regulators and the regulated entities worldwide are looking to increasingly become digitally savvy, data driven organisations, and identify investments in AI/ML that will prove critical to achieving their missions and growing their impact. RegTech use cases continue to gain momentum around the world from regulatory horizon scanning projects including public-private regulatory sandboxes, machine readable drafting and provision of regulations, Application Programming Interface (API)-based regulatory reporting and monitoring, and use of AI/ML to detect signals of misconduct to digital finance reporting including Environmental Social Governance (ESG) datasets.
We look forward to sharing an overview of the opportunities presented by RegTech innovations at the FinTechNZ Hui Taumata, with a dedicated breakout stream developed by RegTechNZ with the valued support of AWS.
The most commonly seen and understood branch of RegTech in New Zealand is identity verification and onboarding to address anti-money laundering (AML), but there are many more opportunities across the sub-sector covering:
● Regulatory horizon scanning, rules and legislation as code, policy management, compliance management and reporting
● Know Your Customer (KYC), transaction monitoring and checking
● Detection of misconduct in market disclosures
● Voice, Social Media, and Prudential analytics
● Fraud, cyber, and privacy monitoring
● Insider trading, and conduct monitoring and training
● Data analytics and compliance by design solutions
New Zealand has a reputation for being well-governed with low corruption, which presents an opportunity for the sector to leverage this international perception to position ourselves as strong in the RegTech space. Some of our innovative solution providers are already active locally and overseas: -
Aplyid — AML
Cloudcheck — AML
Graph Research Labs — Climate Disclosure
VoxSmart — Conduct
There is a lot of opportunity to do more, yet it can be hard knowing where or how to start. RegTech helps those conversations, facilitating connections and creating collaborative environments to work together.
Don’t miss the RegTech stream supported by AWS at the FinTechNZ Hui Taumata