Featured Product

    HKMA Sets Out Two-Year Roadmap to Promote Adoption of Regtech

    November 03, 2020

    HKMA published a two-year roadmap to further promote regtech adoption in the banking sector in Hong Kong. The roadmap has been laid out in a white paper on harnessing the power of regtech. At the Hong Kong FinTech Week 2020, HKMA provided updates on a range of initiatives to further foster the fintech ecosystem and support corporates, including initiatives to promote regtech adoption, use data to facilitate small and medium enterprise financing, and further research on the Central Bank Digital Currency (CBDC).

    HKMA had commissioned KPMG to develop a whitepaper to explore the current state of regtech in Hong Kong, examine common practices and barriers to adoption, and outline a roadmap to accelerate adoption in the banking sector. The research for this white paper is based on surveys conducted with local banks and regtech providers as well as in-depth interviews with banks, regtech firms, local and overseas regulators, and other industry stakeholders. The whitepaper sets out a high-level roadmap of planned initiatives from the list of 16 recommendations that have been developed to aid implementation over the next two years. A couple of key recommendations areas involve boosting awareness by issuing practical guidance and enhancing regulatory engagement with the regtech ecosystem through ongoing dialog and collaboration. To implement the recommendations, HKMA will roll out a series of events and initiatives in the coming two years, including:

    • Developing a Regtech knowledge hub, in the second to third quarter of 2021, that acts as a central repository of all regtech-related content and knowledge-sharing for the Hong Kong banking industry
    • Developing a "Regtech Adoption Practice Guides" series, in the first to second quarter of 2021, that could potentially build on or supersede the "Regtech Watch" newsletter series
    • Devoting some of the “Regtech Adoption Practice Guides” series, to focus on how to utilize the key technologies enabling regtech adoption, in the first to second quarter of 2021
    • Hosting a large-scale regtech event in the first to second quarter of 2021
    • Hosting a regtech challenge in the form of a hackcelerator-style event in the first to second quarter of 2021
    • Developing a regtech skills framework, in the second and third quarter of 2021, that identifies the skills required for different roles to accelerate the adoption of regtech
    • Developing Regtech Adoption Index (RAI), in the first to second quarter of 2021, that covers actual adoption, intent to adopt, as well as key enablers for adoption

    At the Hong Kong FinTech Week, the HKMA Chief Executive Eddie Yue announced that HKMA is exploring a new data strategy and considering building a new financial infrastructure called Commercial Data Interchange (CDI) to enable more efficient financial intermediation in the banking system and to enhance financial inclusion in Hong Kong. To study the technical feasibility of the CDI, the HKMA is conducting a Proof-of-Concept (PoC) study in collaboration with banks. The PoC focuses on using trade-related data to facilitate trade finance application process and is expected to be completed by the end of 2020. The next phase of the study will begin in 2021 to cover other commercial data sources that could facilitate alternative credit scoring conducted by banks.

    HKMA also provided an update on Project Inthanon-LionRock, which is the joint study on the application of a central bank digital currency (CBDC) to cross-border payments conducted by HKMA and Bank of Thailand; this project has entered the second phase. The two authorities aim to explore business use cases in cross-border trade settlement and capital market transactions. The Hong Kong Exchanges and Clearing Limited, 19 participating banks, and five other corporates are going to participate in the project. The two authorities also intend to enhance the cross-border corridor network prototype to support CBDCs of other central banks in the region. They will soon bring banks and large corporates into trials using actual trade transactions. The project findings are expected to be delivered in the first quarter of 2021.

     

    Keywords: Asia Pacific, Hong King, Banking, Regtech, Roadmap, Knowledge Hub, Fintech, Hong Kong Fintech Week, HKMA

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629