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  • user 10:23 pm on July 4, 2018 Permalink | Reply
    Tags: , , , , regtech,   

    Blockchain: the disruptive technology that will make financial markets more efficient – Or maybe not 

    A lot gets published on a daily basis about the seemingly awesome, game-changing possibilities of and other distributed ledger technologies (“DLT”) applied to smart contracts, optimising payments systems and other aspects of the financial markets. A growing number of financial entities are seriously investing in it, and we keep reading and hearing that this is the future of financial markets.

    The message for financial entities being: get in the game now or risk irrelevance tomorrow.

    So what are these distributed ledger technologies all about, and are they all they’re cracked up to be? DLT, in its various flavours, is the behind and every other . The blocks necessary to put together the puzzle to complete a transaction are distributed across a decentralised computer network of users, and DLT’s main selling point is that it’s self-authenticating and very difficult to tamper with.
    Around 2016, started to get very excited about DLT because they figured that it could be applied to efficiently and quickly settle payments and securities transactions, and even to develop smart contracts: algorithm-based programmes that use DLT to automatically detect when a party performs its obligations or fails to do so, and trigger payments or penalties accordingly. It’s easy to see why financial entities get so excited about DLT: it can significantly cut down the time required to settle transactions (a process that normally takes two or three days for securities), and automate verification procedures which are currently carried out manually.

    Ever since that epiphany, financial entities’ investment in DLT has grown dramatically, whilst the rest of us wait with bated breath in anticipation of a brave new financial world any day now – only that it might not happen just yet.
    The fact of the matter is that DLT was developed for the purpose of sustaining cryptocurrencies (and smart contracts, in the case of Ethereum), and it works well in that application. But just because DLT fits the bill for cryptocurrencies, does that mean that it will also do a good job when applied to the financial market infrastructures?
    A few days ago, the Dutch Central Bank published a report with its conclusions on a series of blockchain trials conducted over the past three years to assess the actual usefulness of DLT in realistic financial market infrastructures scenarios. These trials are particularly insightful for a number of reasons:

    • they were conducted by a central bank, which means that the focus was not on commercial gain but on whether this technology is actually fit for transaction settlement purposes from a systemic point of view;
    • they were conducted over a three-year period;
    • over which four different DLT prototypes were tested in different scenarios, all of which conveys the idea that this testing exercise was thorough and reliable.

    When it comes to financial markets infrastructures, there are strict requirements in terms of authorisation, availability, capacity, costs, efficiency, legal certainty, reliability, scalability, security, sustainability and resilience, and each of them is a deal breaker. Current interbank payment systems, such as Target2 in the Eurosystem, meet all of the above requirements and, in the words of the Dutch Central Bank “are highly efficient, can handle large volumes and offer the legal certainty that a payment is completed.” It follows that any new technology must at the very least tick all boxes, and additionally show distinct advantages, if it is to replace existing systems.

    So did DLT live up to the hype? Not quite, it seems. Again, quoting the Dutch Central Bank: “The blockchain solutions we tested proved to be inefficient – in terms of both costs and energy consumption – and unable to handle large numbers of transactions. Furthermore, several consensus algorithms we used will never achieve the full certainty of a transaction, so that it cannot be undone, which the central banks&39; Target2 system offers. Other algorithms are able to withstand parties with malicious intent and have the potential of raising the [financial market infrastructures’] cyber resilience, but they currently fail to meet other [financial market infrastructures] requirements. DLT may well offer enhanced efficiency in payments that involve multiple currencies, however”.
    What does this all mean? It means that, though “the blockchain technology underlying bitcoin is interesting and promising, and future algorithms may well offer improved compliance with [financial market infrastructures] requirements” in its current form, DLT does not seem to cut the mustard.
    Undeniably, DLT is an exciting technology and, in some form yet to be developed, it might be just the ticket to improve the efficiency of financial settlement systems. Just don’t expect that to happen next week.


    Adolfo Pando-Molina is CEO & General Counsel of RegBot®

     

     
  • user 7:16 am on June 1, 2018 Permalink | Reply
    Tags: archiving, mike pagani, regtech, smarsh   

    New frontiers of RegTech archiving: interview with Mike Pagani of Smarsh 

    Fintechna caught up with , Director of Product Marketing and Chief Evangelist, Smarsh at this year’s Global Summit. Mike delivered a session on delivering superior enterprise information and support. In our interview we highlight some of his insights and reflections from the summit.

     

    • Fintechna: In what ways would you say organisations are responding to the growth of collaboration tools?

    Mike: The adoption and use of collaboration tools like Slack, Microsoft Teams, Workplace by Facebook, Symphony and others within the Financial Services industry is happening very quickly, because of the productivity and efficiency they provide employees with compared to email. However, the adoption of these new platforms and tools was not one that IT had planned for and is very much in response to satisfy and catch up with user demands. Rather than being ahead of the curve, most organisations are now suddenly realizing that their people are using these new platforms and tools more and more and must implement archiving and supervision systems as quickly as possible, to make them compliant as an approved means of business-related communications. Whether internal or external communications, all business-related messages must be governed the same way as email, regardless of the form they take and the chosen channel.

     

    • Fintechna: What are the key capabilities you think an organizations archiving solution should provide it with? 

    Mike: In our view it all boils down to 3 key capabilities. It should allow a Financial Services organization to automate the direct “capture” all of its business-related communications from the source, regardless of the type and channel being used by its workforce and retain it in a way that does not materially alter the messages, so original context is preserved for later search, insights and to be used for legal and regulatory responses. It should also provide an organization with the ability to configure the system and fine tune it so it “reveals” the riskiest and most potentially problematic messages to them, as they are captured so the organization can take appropriate action to mitigate compliance and legal risk. And lastly, the solution should enable the organization to “respond” to regulatory requests and legal events in a quick and efficient manner, with granular search capabilities to retrieve very specific information from within the archive and then package them up, so they can be used as part of a regulatory  examination or legal defense knowing that time is of the essence when responding.

     

    • Fintechna: How are leading financial institutions coping after MiFID II and in what areas do they need help?

    Mike: Most financial institutions saw MiFID II approaching and took swift action to establish the correct set of policies to meet compliance requirements. However, many are still in the midst of searching for and adopting the right automated systems to enforce those policies in an effective and efficient manner (such as comprehensive archiving platforms with active supervision and compliance capabilities), versus adding more and more people to compliance and legal functions to meet the new demands.

    • Fintechna: How important is it for a business to actively supervise business communications? 

    Mike: Actively supervising business communications is extremely important. Not only to discover potential compliance violations and take appropriate action on them to meet regulatory requirements, but to also spot messages and ongoing activities by its people that could cause legal, reputational and brand damage as well.

    • Fintechna: Do you have a key takeaway from this year’s Global Reg Tech Summit on the importance of social media?

    Mike: I do… Financial Services firms of all types and sizes are being forced to embrace social media in a much bigger way moving forward to adapt to significant changes taking place within the age demographics of the clients they are serving and trying to attract, as well as their own workforce. For example, millennials will favor doing business with firms that are socially active and allow them to get the information and resources they care about via the social channels they already know and like to use. For example, using Instagram for a marketing campaign targeted at younger, early in career investors, is something we are seeing a lot more of these days. The days of compliance professionals simply saying no to the use of these new channels are over and they are instead now saying yes to compete and stay relevant, but also stressing the importance of having the right systems in place to make sure that the communications over these new social channels and the resulting interaction stays compliant in the process. The good news is like comprehensive archive platforms with active compliance capabilities has now evolved to the point where it is quick, easy and cost effective to implement a solution that enables organizations to get all the benefits of social media and other new channels while maintaining compliance and mitigating the new risks that they introduce when compared to older channels like email.


    BIOGRAPHY

    Mike Pagani is Senior Director of Product Marketing and Chief Evangelist at Smarsh. With more than 25 years’ experience working with new and emerging technologies, he is a seasoned IT professional and recognized subject matter expert in the areas of mobility, identity and access management, network security, virtualization and information archiving. In his current role, Mike is a frequent industry event speaker, and contributes regularly to trade publications and online media outlets. Prior to joining in November 2014, he held senior technology evangelist positions with Dell Software, Quest Software and NComputing.

     

     
  • user 12:18 am on April 28, 2018 Permalink | Reply
    Tags: , , , , , , , , regtech, Synechron’s,   

    Synechron’s RegTech Program Aims to Help Banks Reduce Compliance Costs 

    EXCLUSIVE – services provider Synechron launched a focused on helping its financial services clients on regulatory issues. The program, which Synechron refers to as its Regtech Accelerator Program, went live yesterday. Although it is called an accelerator, the model of the program is based on Synechron’s project (also called an [&;]
    Bank Innovation

     
  • user 10:52 am on April 4, 2018 Permalink | Reply
    Tags: 30000, II's, , , regtech, , , ,   

    Understanding MiFID II’s 30,000 Pages Of Regulation Requires RegTech 

    Financial regulations are streaming forth faster than mere humans can read and interpret them. Regulators need to employ tech to create machine-readable standards — FCA is leading the way — while users and fintechs need to work with regulators to develop standards.
    Financial Technology

     
  • user 12:18 am on July 15, 2017 Permalink | Reply
    Tags: , , regtech, , SeedStage   

    RegTech and Insurance Remain Hot with Seed-Stage VCs 

    Compliance, , and workflow solutions: these are the most interesting areas for a seed-stage investor right now. Chris Fortunato, principal at KEC Ventures, named compliance and insurance as two of his biggest current focuses during Bank Innovation’s &;For the Love of Fintech&; meetup yesterday. “We’re definitely very interested in compliance. It’s just a very good [&;]
    Bank Innovation

     
  • user 7:46 am on April 4, 2017 Permalink | Reply
    Tags: , , , regtech   

    RegTech: what is it and what are the benefits? 

    Following on from my previous blog introducing the new year in the Innovation programme, I wanted to turn the focus onto the emergence of —technologies that address the challenge and cost of regulatory compliance. Over the past couple of years, we’ve seen RegTech arise as an entity in its own right. It’s a welcome development: financial regulation’s been increasing in complexity since 2008…and so has the compliance challenge. Looking ahead, with new technologies like and smart contracts coming into play, the pace of regulatory change will accelerate even more.

    RegTech has two aims: increasing the effectiveness and the efficiency of compliance. Both are critical. The cost of non-compliance, e.g. fines, legal bills and compensation is estimated by Standard & Poor at £19.5 billion over the past year for the UK alone. Similarly, the cost of compliance is a heavy burden on the industry, somewhere between £10 billion and £20 billion in the UK. There are hidden costs too. Increased bureaucracy damages customer retention and onboarding, while complex regulation can get in the way of innovation.

    Continue reading the post RegTech: what is it and what are the benefits? on Accenture Banking Blog.

    Accenture Banking Blog

     
  • user 1:50 pm on April 2, 2017 Permalink | Reply
    Tags: , , , impacting, industry—and, , regtech, , , ,   

    RegTech: How investment trends are impacting the industry—and how the ecosystem can work with the regulator 

    What a week—with graduation days complete, we had a chance to review progress in the Labs. Development was evident everywhere—product, but also management teams.

    I wanted to follow on from my previous blog around the emergence of (technologies that address the challenge and cost of regulatory compliance.) I wanted to explore how in this area are the industry and how the can with the . We’re lucky to have Jason Boud—who is pulling together a strong community in London—with us in the Labs.

    Right now, compared with , RegTech has low investment for the size of spend. Although governance, compliance and regulation (GRC) represents around 15-20 percent of run-the-bank costs and 40 percent of change-the-bank costs,[1] in 2015, US$ 588 million was invested in RegTech[2] versus US$ 22 billion in Fintech[3]. This suggests enormous potential for growth in the RegTech space from now on.

    Now—what does RegTech mean? RegTech means… RegTech! We think about RegTech as that lowers the “cost” (technical, physical, monetary) of regulation by using technology. It’s relevant not just in banking, but capital markets, wealth management and insurance. At its most basic, RegTech might be using better data, a workflow to reduce the complexities of reporting—or responding to new reporting requirements. Perhaps it’s making better use of existing data to lower the challenges of regulation for compliance staff—as FinTech Labs start-up, Enford, is excelling at. At the more advanced end—and with a timeline a few more years out—perhaps it’s applying machine learning or advanced AI to complex regulatory documentation, to help us ‘learn’ what the regulatory requirement is and apply a response to it.

    The RegTech ecosystem requires several different backgrounds to come together: finance, entrepreneurs, regulators, lawyers and change managers. Now—given that background, employees in these areas often have a deeper knowledge base and clearer career track in industry (and salary expectations) than perhaps people who have founded traditional Fintechs. There’s a risk that fewer start-ups will enter the market; so we think the area would benefit from a degree of nurturing. Lessons can be learnt from how partnered with Fintechs. This should provide a clearer roadmap for growth, help identify pain points in adoption and build confidence.

    We’re certainly seeing an upsurge in activity. It’s great news for the industry, but it also raises a number of priorities. As more and more solutions are launched, it’ll be important to prevent the marketplace from becoming fragmented. Start-ups need to ensure that they’re not point solutions, but can be embedded across the business, and that they can collaborate with other RegTechs to provide more complete solutions. That might mean, for example, a trader surveillance RegTech that tracks computer activity partnering with voice recording and behavioural analytics to provide a more comprehensive solution.

    For problems at the most regulated end of the business, they’re likely to be even more cautious about entering partnerships. Banks that will lead here will be the ones that are already successfully integrating their innovation agendas into the business and have built channels for partnering with Fintechs. In other institutions, regulatory and compliance functions may have to go through the same learning curve as their colleagues did with Fintech before they establish effective RegTech partnerships.

    Regulators have a key role to play, too. They can help drive adoption and lower the regulatory burden by collaborating with the industry to enable greater clarity and more long-term planning. Once banks have a clearer view of what lies ahead, they’ll be more willing to invest in new technology solutions and less likely to make ad hoc, incremental changes. Certification or approval of RegTech solutions would be helpful too, allowing banks to use RegTech with more confidence.

    The FCA is being extremely proactive in this area: Its ‘regulatory sandbox’, which allows start-ups to test products in a live environment, is now being copied in other jurisdictions. Looking ahead, Accenture has called on the FCA to become the ‘Github of regulatory code and business logic’. If regulation is written to be machine readable, it’ll help create a standardised set of rules and logic that ensures compliance and compatibility with technology solutions.

    Banks know that they should partner with RegTech… but they don’t always know how. Guidance from the regulator will be key to fostering a richer ecosystem—one in which banks feel confident about the trajectory of regulation, and where start-ups can quickly and easily assimilate the logic of regulation to deliver the innovative solutions that are so essential.

    Watch this space!

    [1] http://www.bain.com/publications/articles/banking-regtechs-to-the-rescue.aspx
    [2] https://www.cbinsights.com/blog/regtech-compliance-startup-funding-trends
    [3] http://www.fintechinnovationlablondon.co.uk/fintech-evolving-landscape.aspx

    The post RegTech: How investment trends are impacting the industry—and how the ecosystem can work with the regulator appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • user 12:18 pm on December 8, 2016 Permalink | Reply
    Tags: , , , , regtech, Thrives, , Welcoming   

    Regtech Thrives On Change: Welcoming Trump, Brexit and China 

    Heraclitus, a Greek philosopher of the 5th century BC, is quoted as saying “ is the only constant in life.” His doctrine was around change being central in the universe. This has also been translated to “the only constant is change.” And this exactly why , the cross-sector category, and will continueRead More
    Bank Innovation

     
  • user 3:35 pm on December 1, 2016 Permalink | Reply
    Tags: , , regtech,   

    FinTech-Regulierung in der Schweiz; Von FinTech zu RegTech 

    Nachdem nun ein Ansatz für die regulatorischen Rahmenbedingungen für den Markteintritt von -Unternehmen ausgearbeitet worden ist, sollen auch die für den laufenden Geschäftsbetrieb einzuhaltenden Regulierungsanforderungen möglichst effektiv und effizient umgesetzt werden können.

    Dies ist naturgemäss nicht nur ein Anliegen von FinTech-Unternehmen, sondern auch von den traditionellen (regulierten) Teilnehmern im Finanzmarkt. So besteht ein Lösungsansatz darin, mittels technologischen Lösungen die regulatorischen Anforderungen möglichst kosteneffizient umsetzen zu können, um sich so den Mitbewerben gegenüber einen Wettbewerbsvorteil zu verschaffen.

    Als Schlagwort dazu hat sich der Ausdruck «» etabliert, welcher von der Finanzmarktaufsicht des Vereinigten Königreiches als «a sub-set of FinTech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities» definiert worden ist.

    regtech financial services (1) - Copy

    FinTech-Unternehmen (sowie auch andere Marktteilnehmer), welche berufsmässig fremde Vermögenswerte annehmen oder aufbewahren oder helfen, sie anzulegen oder zu übertragen, gelten als Finanzintermediäre nach Art. 2 Abs. 3 GwG. Diese müssen strenge Sorgfalts- und Meldepflichten einhalten. Dazu gehören z.B. die Pflicht zur Identifizierung der Vertragspartei (ab gewissen Schwellenwerten und in unterschiedlicher Intensität), Abklärung der Hintergründe einer ungewöhnlichen Transaktion oder unterschiedliche Dokumentations- und Organisationspflichten.

    Diese als Beispiele genannte Pflichten können nun manuell oder in unterschiedlichem Umfang durch technologischen Lösungen erfüllt werden. Mittels automatisierten und semantischen Suchen können umfangreiche private und öffentliche Datenquellen zielgenauer durchsucht und der manuelle Review auf ein Minimum reduziert werden um Know Your Customer-Anforderungen zu erfüllen.

    Transaktionsüberwachungs-Lösungen, welche in Echtzeit und automatisiert mögliche geldwäschereirelevante Tatbestände erkennen, reduzieren ebenfalls den manuellen Überwachungsaufwand.

     

    regtech

     

    Neben diesen zwei beschriebenen Einsatzmöglichkeiten im Bereich der Geldwäschereibekämpfung hat das Institute of International Finance weitere Anwendungsbereiche für RegTech-Lösungen identifiziert. Dazu gehören

     

    • Risikodaten-Aggregation für regulatorische Reportings

    • Modellierungen sowie Szenario-Analysen und Prognosen für Stresstests und Risikomanagement

    • Analyse des Verhaltens und der Organisationskultur zwecks Erkennung von Marktmissbrauch oder anderen Fällen von Wirtschaftskriminalität oder die Analyse des Umganges mit Kundenbeschwerden

    • Umsetzung der vielfältigen Anforderungen an den Handel von Finanzinstrumenten

    • Erkennung von regulatorischen Entwicklung mit Auswirkung auf das eigene Unternehmen sowie Feststellung der Auswirkungen für die entsprechenden Geschäftseinheiten

     

    regtech financial services (3) - Copy

    Während kurzfristig die Automatisierung von einfacheren Compliance-Prozessen umgesetzt werden kann, weitet sich der Anwendungsbereich von RegTech durch die technologische Entwicklung in den Bereichen künstliche Intelligenz, maschinelles Lernen und Robotik weiter aus.

    Der Aufwand für Compliance und Risikomanagement kann durch RegTech gesenkt werden und regulierte (FinTech-)Unternehmen können die dadurch freigewordenen Ressourcen für die Entwicklung von Innovationen in ihrem Kerngeschäft nutzen. Dadurch kann der Finanzplatz als Ganzes gestärkt werden um sich optimal im globalen Wettbewerb zu positionieren.

    Der Autor analysiert gegenwärtig vertieft RegTech-Einsatzmöglichkeiten und erweitert den vorliegenden Beitrag zur gegebenen Zeit. Inputs dazu sind willkommen.

     

    Featured Image: via Fotolia

    The post FinTech-Regulierung in der Schweiz; Von FinTech zu RegTech appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     
  • user 12:18 am on June 27, 2016 Permalink | Reply
    Tags: , , , , , regtech, thematic, ,   

    Wrap of Week #25: Regtech thematic week on Daily Fintech 

    &; is a cross sectional vertical that is emerging in all sorts of shapes and forms. It is global but with heavy concentration in the developed financial markets. Regtech services are offered from both startups and established service providers.&160;Last at the focus was on Regtech: A high level overview of the&;Read more of Week : Regtech week on Daily&160;Fintech
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