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) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.