September 5, 2019
Certain events, over the past decade, sparked a far-ranging overhaul of the international architecture for financial regulation, coupled with a deep reflection around the fitness-for-purpose and effectiveness of supervisory efforts. For instance, in response to the financial crisis that began in 2007, achieving transparency within the financial sector accounted for nearly 20% of the 2009 Group of 20 action plan. Since then, hundreds of rules have been written and – with more than 30 new reporting regimes coming down the pipeline to 2020 and beyond – firms and regulators continue to commit significant resources to implement the ongoing change requests on top of managing existing obligations.
Consider, for example, that over the last 10 years or so, regulators have demanded more information and tougher compliance requirements from the organizations they oversee. Whether the financial crisis, the Panama Papers or AML lapses, there is a deep imperative for regulators to ensure that obliged entities are meeting the standards enshrined in laws. Along with more regulation and more reporting comes the need for more transparent, tech, and data-driven approaches to report and monitor activities with reduced risk and errors. With new technologies to solve regulatory and compliance requirements more effectively and efficiently, RegTech has been one of the hottest investment and entrepreneurship areas, but it also has been a starting point for another area of development – supervisory technology, or SupTech – which offers an opportunity to supervisory agencies much like RegTech brings efficiency to industry regulators and reporting institutions.
In collaboration with RegTech players, regulators are increasingly using technology to digitize data, streamline their operational procedures, and automate the regulatory reporting and collection process, while also driving broad-based innovation in policymaking and regulatory strategy. In addition to operational efficiency enablement, SupTech is also driving broad-based innovation in policymakin ...