HKMA published a summary of the flagship Regtech Conference “Unlocking the Power of Regtech,” along with the closing remarks from Arthur Yuen, the Deputy Chief Executive of HKMA. HKMA also announced winners of the Global Regtech Challenge, wherein regtech providers were invited to take part to showcase how their solutions may be applied to the local market to help solve common risk management and regulatory compliance pain points experienced by banks. Out of the four winning solutions, two were from Wolters Kluwer in the categories of compliance and risk management. Another notable development is the publication of the inaugural Regtech Adoption Index (RAI), which is compiled based on a comprehensive analysis of the regtech adoption status in the banking industry in Hong Kong.
The results of the first Regtech Adoption Index indicated that the majority of banks in Hong Kong had embarked on their regtech journeys and that there are enormous opportunities for growth and collaboration within the regtech ecosystem. In his closing remarks, Mr. Yuen outlined the reasons HKMA is prioritizing regtech and discussed ways to overcome regtech adoption challenges, grow and nurture regtech in Hong Kong, and achieve the regtech 2025 vision of HKMA. Looking ahead, HKMA expects the demand for regtech solutions to continue to grow. In the year ahead, HKMA plans to provide more guidance to the industry by issuing the Regtech Adoption Practice Guides, developing a regtech skills framework, and building a regtech knowledge hub. Mr. Yuen also shared four key takeaways for overcoming the challenges connected with regtech adoption:
- Stakeholder buy-in across financial institutions
- Use of good quality data to build effective models and generate decision-making insights while focusing on a solid set of data governance rules
- Adoption of robust risk management frameworks and starting on a small scale, for example by conducting a Proof of Concept in a business unit or implementing regtech in a cloud-based environment in a newly established part of their business
- Bridging of gaps in technical capability of banks via collaboration among regtech solution providers and professional services providers, such as technology firms and advisory firms, with some banks have already successfully implemented regtech using external vendor technology for some of their solutions
One of the key discussion topics during the conference was that collaboration among different parts of the ecosystem is crucial for overcoming the regtech adoption challenge. Another way to address adoption challenge could be to develop solutions for addressing common risk and compliance pain points experienced by banks. To this end, HKMA had held a regtech challenge, under which Wolters Kluwer emerged as a winner in two categories. With respect to Governance, Risk, and Compliance category, the problem statement of Wolters Kluwer was focused on the use of technology to optimize regulatory compliance of all internal and external obligations. Additionally, with respect to the solution win for the risk management category, the focus was on using technology to enhance the delivery of stress testing requirements, driven by needs across different risk, compliance, and business unit teams.
Keywords: Asia Pacific, Hong Kong, Banking, Regtech, Wolters Kluwer, Regtech Adoption Index, RAI, Cloud Computing, Regtech Adoption Practice Guide, Regtech Vision 2025, Regtech Ecosystem, HKMA
Next ArticleMNB Issues Multiple Regulatory Updates for Banks
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.