TECHNOLOGY
Introduction to Regtech Compliance
Discover Regtech's role in streamlining compliance, amplified by 2020's digital shift. Learn its wide-ranging applicability across regulated industries, revolutionising compliance functions like monitoring and reporting, as noted in reputable sources.
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Regulatory framework
Regulatory structures
Risk-based thinking
Compliance
Application of Regtech
Course Lessons
International Regulation
This chapter will highlight the central role of the G20 in setting global regulatory directions, which are developed into non-binding "soft law" standards by organisations like the Financial Stability Board and the Bank for International Settlements. These international guidelines, such as the FATF's anti-money laundering recommendations, are voluntarily integrated into domestic legal systems and influence enforcement through international monitoring and compliance mechanisms
Fintech needs Regtech
This chapter emphasises the symbiotic relationship between financial technology (Fintech) and regulatory technology (Regtech). It highlights the necessity of Regtech solutions like electronic Know Your Customer (eKYC) for the viability of Fintech innovations, such as challenger banks, which enable remote and rapid account opening that complies with regulatory identity verification requirements. The chapter also discusses the balance between enhancing customer onboarding experiences and meeting stringent regulatory standards to prevent issues like money laundering, as demonstrated by significant fines imposed on major banks for compliance failures.
Supervisory Architecture
The chapter "Supervisory Architecture" delves into the complexity of global financial regulatory structures, highlighting that while regulatory objectives may be universal, each jurisdiction has its own unique system. It discusses the four primary regulatory frameworks: sectoral, integrated, functional, and Twin Peaks, each differing in how they oversee various financial sectors and functions. The chapter underscores the challenges these differing structures present for compliance and the role of Regtech in simplifying and reducing the cost of adherence to these diverse systems.
Regulatory mandates
This chapter emphasises the importance of understanding regulatory mandates in the context of Regtech. It explains that regulations are not arbitrary but are designed to prevent financial crises and support economic stability, which are costly to the financial sector, governments, and society. The chapter delves into two forms of regulatory mandates: macroprudential regulation, which deals with systemic risks and interconnections in the financial system, and microprudential regulation, which focuses on the safety and soundness of individual financial institutions. Both areas highlight the critical role of technology in gathering, analysing, and reporting data to ensure compliance and uphold the mandates of financial stability and consumer protection.
Sandboxes and Proportionality
The last chapter teaches that regulatory sandboxes are innovative platforms established by regulators to test and nurture financial technologies in a controlled environment, aiming to strike a balance between risk management and the promotion of innovation without stifling it. It emphasises the importance of regulators adopting a proactive, adaptive, and proportionate approach to regulation that embraces technological advancements and data analysis to better assess risks and support new financial solutions.

Meet your instructor - Douglas Arner
Kerry Holdings Professor in Law at The University of Hong Kong
