HKMA Issues Regtech Adoption Guide on Governance, Risk, and Compliance
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 Article
PRA Consults on Rules for Domestic Liquidity Sub-GroupsRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.