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While emerging technologies are creating new challenges for regulators, they are also reaping the benefits. With limited resources, regulators are using technology such as AI and big data analytics to fight financial crime by making AML and CTF controls more effective and efficient. In addition, sandboxes and incentives are being used to entice the best new technology to enhance their systems.
Where will RegTech and Supervisory Tech make the biggest impact for regulators in 2019?
Financial institutions collect and verify vast amounts of customer data in order to flag those that are high risk. However, a lot of the data is unstructured, making fraud and AML harder to spot by them and the regulators.
Regulators are embracing natural language processing and machine-readable technology to automate previously manual processes by extracting information from industry data, misconduct reports and complaints reports. They are also using knowledge graphs to study suspicious transaction reporting and applying AI with the intention of predicting human behavior in the future.
With KYC and transaction monitoring being automated, the collection of risk data is expanding and improving. However, this means regulators must expand their investment in supervisory technology in order to keep up and be able to analyze the reported data to understand the underlying trends.
As such, Regulators across the Asia Pacific are reaching out to regtech innovators to jointly develop technology to use in their systems, and are running fintech sandboxes to test it out. Technology is opening new opportunities for regulators to streamline their processes but the challenge will come in how organizations can integrate innovations into their human-centric legacy systems.
To read more about the RegTech and Supervisory technology developments and applications, download the full report.
Regulatory regimes in Asia Pacific are being challenged by the need to adapt to rapid technological innovations and an erosion of trust in a sector tainted by high-profile cases of financial crime enforcement. Learn how these challenges are being addressed.
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