The Hong Kong Monetary Authority (HKMA) issued the third issue of the Regtech Adoption Practice guide, which focuses on regtech solutions in the space of Governance, Risk and Compliance or GRC. The GRC is a framework of people, processes, and technologies to gather and aggregate risk information across an organization to enable timely management attention and action. The practice guide introduces a modular approach to building a GRC regtech platform and outlines the key implementation components based on observations of what others have successfully done. These include maturity analysis, GRC vision, project governance and IT change control, and process change management. Successful implementation of GRC regtech solutions requires firm-wide support for digital transformation.
As a successor, this Regtech Adoption Practice guide series builds on the “Regtech Watch” newsletters to include common industry challenges, guidance on implementation, and examples of what others have done successfully to overcome adoption barriers. The guides are to supplement other ongoing HKMA initiatives such as the Banking Made Easy initiative, Fintech Supervisory Sandbox, and the Fintech Supervisory Chatroom. Ultimately, the guides should enhance sharing of experience related to regtech implementation in the industry, which will help further drive regtech adoption in Hong Kong. The purpose of this guide is to provide an overview of the GRC regtech solutions, outline the common challenges observed regarding GRC solutions adoption, and share information on how others have addressed the challenges to successfully adopt GRC regtech solutions in their organizations. This guide:
- Explains how regtech solutions can be used to support GRC. It outlines the key GRC-related challenges that Hong Kong-based banks are facing, illustrates the benefits of leveraging regtech solutions to manage GRC, and describes key risks/considerations when adopting GRC solutions.
- Provides practical implementation guidance to banks on the adoption of GRC regtech solutions. It outlines the key components of GRC Regtech implementation, including the types and methods of GRC regtech solution implementation, and provides insights on what others have done to achieve successful regtech adoption.
- Shares use cases on the adoption of regtech solutions to manage GRC. It describes the GRC challenges faced by a bank and how the regtech solution helped to resolve these challenges. It also outlines the key lessons learned from successful GRC regtech implementation, from both the bank and the regtech provider’s perspectives.
Keywords: Asia Pacific, Hong Kong, Banking, Regtech, GRC, Governance, Guidance, Fintech, HKMA
Previous ArticlePBC Issues List of Systemic Banks, Adds 2 Foreign Banks to CERB List
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.