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Notes and Quotes: FinTech and RegTech in a Nutshell

Notes and Quotes: FinTech and RegTech in a Nutshell

The CFA Institute Research Foundation recently published "FinTech and RegTech in a Nutshell, and the Future in a Sandbox." Here are some excerpts I found interesting.

"The evolution of FinTech necessitates a parallel development of RegTech. In particular, regulators must develop a robust new framework that promotes innovation and market confidence, aided by the use of regulatory sandboxes." (p 1)

"The true potential of RegTech lies in its ability to effect a profound transition from a "know your customer" to a "know your data" approach." (p 3)

"Regulators expected that e-banking providers would be authorized financial institutions.... But FinTech 3.0 called for a radical rethinking of that view." (p 6)

"Fintech growth has been fueled by startups.... In comparison, RegTech has emerged in response to top-down institutional demand arising from the exponential growth of compliance costs." (p 10)

"Despite attempts to establish similar post-crisis reforms, different markets can have substantially different rules for implementing those reforms. Regulatory overlaps and contradictions are not uncommon, and financial institutions have, unsurprisingly, looked to RegTech to optimize their compliance management." (p. 13)

"Fertile areas for RegTech include (1) application of big data approaches, (2) the strengthening of cybersecurity, and (3) the facilitation of macro-prudential policy." (p 15)

"Regulatory sandboxes are shaping up to be fundamental to the development of new regulatory approaches." (p 18)


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