Regulation continues to move fast and PJ and Corrina summarise how the RegTech agenda is coming into focus for 2022. They discuss how RegTech is now at another tipping point where it will be asked to help with interoperability between TradFi and Digital Finance. JWG explains the key regulatory drivers and how they will tackle the themes in RegCast Season 2 which you can find in the 2022 Beacon which is on the JWG website here.
The RegTech agenda will be dominated by the shift to digital finance in 2022. We see five key themes:
- Digital infrastructure integrity. As consumer gamification, meme stocks and private markets set expectations for TradFI, RegTech will be required to tokenize rule sets for financial crime, investor protection, surveillance post trade clearing and settlement processes
- High-fidelity transparency. Digital assets will come into the light as regulatory reporting obligations bring them into scope. While we wrestle with the ESG reporting conundrum, RegTech and SupTech will be called upon to help with big shifts in the market and reference data and define the boundaries of ‘digital sovereignty’
- Digital supply chains. As one pundit put it “OpRes is seen by many regulators as the equivalent of settlement risk in the 1970s.” Tens of thousands of actors will need RegTech and SupTech for third party risk management and technology risk from AI, Cloud, Cyber and Quantum and much more
- Tokenization of compliance. Thought leaders have been calling for RegTech to enable rule sets to be linked to transactions, attached to policies and mirrored by controls. As senior management is increasingly trapped by accountability and conduct controls, we see a new dawn emerging in this space
- Model-driven controls. With Operational Risk Managers overseeing tens of thousands of risk control assessments, RegTech has the opportunity to help drive the linkage between data controls and risk. Semantics and standard taxonomies are on the table for discussion this year.
As we enter the second decade of JWG being at the forefront of RegTech, we find some policies heading nicely up the mountain and beginning to scale. Has it gotten into production yet? No, but at least the targets are starting to emerge, awareness is rising, and we are beginning to frame what ‘good RegTech looks like’.
For more on JWG’s 2022 agenda, see our post here.
Speakers and Guests
Aired on: January 27, 2024
Aired on: September 17, 2021