How Regulatory Technology (RegTech) is transforming governance? To kickstart the 45-minutes long discussion, Chye Kit who had the honour to moderate the panel session threw his first question at the fellow panelists.
“From a scale of 1 to 10, how effective do you think is the governance / financial control in financial sectors today?”
While going round the table among the panelists on their thoughts and opinions on the current financial control, as well as their respective scoring that they had in mind, we saw a very diverse point-of-view and scoring from the panelists. While some of the panelists felt that the current governance and financial control is not done well and to a certain extent, can be corrupted and manipulative, others felt that there could be room for improvement as no governance is perfect. RegTech therefore comes into play to make things more efficient for players (Banks and FIs) within the financial sectors, as these players eventually will still benefit from RegTech.
Diving deeper into the topic of the panel session, there were several more questions raised by Chye Kit, which also sparked an exciting discussion among the panelists.
“What do you think of the importance of digital identity across the customer lifecycle journey?”
Digital identities are the foundation of a greater digital future, and it is a very important area in RegTech, where regulators around the world have also issued some papers around digital identities. Especially during this period of pandemic, digital identity has flourished greatly and no doubt, biometrics and facial recognition are being widely used during customer’s onboarding process. Many Banks and FIs are now allowing their customers to verify and authenticate their accounts virtually through digital identity, which actually brings greater convenience to the end-user. However, companies have to strike a balance between convenience and security. Onboarding processes and software used have to be secure and accurate in order to avoid the potential errors to surface down the line.
“What do you think FIs should be looking out for when using external RegTech solutions? How do they select and ask the right questions to the vendor?”
Hopping onto the next question, the panelists shared that security and data privacy are of great concern for many Banks and FIs when engaging with the RegTech solutions providers. One of the panelists pointed out a key takeaway for the audience - Prevention is better than cure. Today, two-thirds of the data breaches are caused by third-party vendors hence cybersecurity is crucial and important now more than ever. A valuable piece of advice for Banks and FIs is to conduct sufficient due diligence and consultation upfront, which includes understanding where the external vendors’ data are being stored and their level of cybersecurity, prior to outsourcing and engaging any vendors.
“What is your prediction for RegTech adoption in the next 3 years?”
Based on one of the researches that one of the panelists conducted, the RegTech market is going to reach $55 billion in 2025 as we can see a trend that smaller and bigger banks, as well as other companies in the financial sector, are partnering with a lot of RegTech companies. Most of the other panelists are also optimistic about the future of RegTech as technology complements business such that it becomes part and parcel of our life.
About Cynopsis Solutions
Founded in 2014 and headquartered in Singapore, Cynopsis Solutions offers RegTech solutions designed to digitise and automate Compliance and regulatory processes, in particular know-your-customer, anti-money laundering, and counter-terrorism financing. Cynopsis Solutions’ accolades include MAS FinTech Awards (2018), RegTech100 (2018, 2019) and Financial Times Top 50 High Growth Companies in Asia-Pacific.
Our end-to-end KYC/AML solutions are designed according to the global FATF recommendations, applicable to more than 180 jurisdictions and is already helping more than a thousand B2B customers in the Banking, Financial Services, FinTech and Cryptocurrency, Professional Services and Gaming sectors globally.