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Innovation to Manage Risk & Compliance Across the APAC Region


Q&A with Mark Austen, CEO, Asia Securities & Financial Markets Association (ASIFMA)

What practical steps does the financial services industry need to take, to ensure the RegTech agenda moves forward?
Collaboration between the regulators, the RegTech firms/startups in the ecosystem and the financial institutions will be key. FIs will need to identify areas that could benefit from automation and RegTech solutions, and then work collaboratively with other industry colleagues to build solutions or work with start-ups to create them. Regulators will need to change the way they want to receive data and information to accommodate efficient RegTech solutions which may require the tweaking of current laws and regulations. Everyone will need to potentially upgrade staff skill sets

Which existing regulatory or compliance requirements benefit most from a RegTech solution?
Client onboarding and KYC that is either utilized or put on the blockchain thereby offering substantial cost-savings and better customer experience while at the same time holding the industry to higher KYC standards to prevent money laundering and terrorism financing. We also see a lot of potential for Digital ID, which is a fundamental cornerstone to further develop other fintech and RegTech solutions but requires a concerted effort between the industry and regulators and preferably cross-border to create standards that can be used globally. Finally, enhanced regulatory reporting which allows regulators and perhaps the industry to pull data rather than have it pushed to them. In this way, they can analyse data and generate regulatory reports in real time, including scenario analysis on the issues that matter to them; whereas the industry can do large data dumps into multi-product cross-border utilities rather than in a fragmented and costly manner to multiple regulators for different products in various jurisdictions. This current model is not fit for purpose as is extremely costly but, more importantly, regulators cannot access most of the data they require as it is outside their jurisdiction.

How does RegTech work alongside existing regulatory compliance roles within financial services institutions?
The challenge of rapidly transforming financial systems requires increased use of and reliance on RegTech. It is very likely that the ultimate responsibility will continue to sit with the FIs. You cannot “outsource” the risk to Regtech startups as regulators will not allow that. However, some of the Regtech startups might turn the compliance department into a profit centre by allowing them to share their data with other firms; and it might reduce the number of makers and checkers needed in the firm thereby saving cost. And utilizing the new RegTech tools will mean the profile of the compliance staff within firms might need to be upgraded as these individuals become more tech savvy and less legalistic rule followers.

How can RegTech improve products and services for consumers?
Client onboarding has become a real issue. The stringent and ever changing regulatory and internal bank requirements as well as multiple client touch points have negatively impacted customer experience and have even led to debanking of some customers in the region due to the cost of doing KYC versus the profit generated from the services sold to the particular client. RegTech might be able to solve this which will mean that things such as switching bank accounts becomes relatively painless whilst institutional clients can maintain larger groups of counterparties thereby making the financial markets more competitive. RegTech will reduce the cost of compliance by simplifying and standardizing compliance processes and making them more electronic, which will ultimately benefit consumers.

Why will you be joining the RegTech Summit APAC, and what do you hope to get out of the event?
A thorough discussion of the issues raised above as well as learning more about cutting edge developments in this important sector.