Suptech: Disruptive Technologies in Reporting, Regulation and Supervision
01 - 01 Jan, 1970
To Be Determined;
In 2022, technological innovation is disrupting financial markets and their regulation. Cryptocurrencies are forcing regulators and supervisors to take sides, cyber threats bring new dimensions to systemic risk, and digitalisation is generating revolutionary platforms for both improved financial services and financial crime and fraud. Increasingly, supervisors see proactive application of advanced technologies like machine readability, big data, and machine learning opening up unprecedented regulatory and supervisory possibilities. Innovation in both suptech and regtech offer new tools and frameworks to accelerate risk-based reporting as well as monitor systemic risk. Yet, central bankers recognise that in order to make the most of these emerging opportunities, significant change is needed: at methodological, technical and institutional levels.
By the end of the course, participants will be able to:
- Understand how suptech is changing the business and relationships of supervision
- Gain insights into how regtech can strengthen regulatory frameworks
- Manage potential risks of outsourcing technology
- Understand the role of central banks in the digital money ecosystem
- Create a framework for managing challenges of regulating big tech
This course is designed to equip central bankers to meet these challenges. Each day will feature three hours of expert-led Live Content to maximise the opportunity to share and learn. The chair will
ensure participants have opportunities to network throughout the course, with time set aside for a workshop on implementing key learnings.
Course introduction session led by the chair
- Introductions and welcome from the chairperson
- Overview of the training course
- Discussion of the participant expectations
Overview of the foundations of regtech and suptech
- Evolutionary journey of financial, regulatory, and supervisory technology
- How has regtech and suptech impacted the financial services industry?
- Identifying key technologies in the areas of DLT, big data analytics, machine learning and cloud computing
- Examples of applications in regulatory reporting and compliance risk management
Fintech: implications and opportunities for central banks
- Overview of key fintech applications
- Key characteristics of effective frameworks for supervision of technological innovation
- Implications and opportunities for central banks and their institutional organisation
- Cooperation and coordination with the private sector
Supervision of fintechs: challenges and risks
- The role of central banks in the fintech ecosystem
- How to frame an oversight framework capable of capturing the activities of fintechs
- Increasing international cooperation between banking supervisors and relevant authorities
- Lessons learnt and practices for interactions with fintechs
Applying suptech to payments & alternative data to support risk analysis
- Overview of key trends and development within suptech analytics
- Examples of alternative & payments data - and their integration into supervisory and risk analysis
- Tips for successfully combining proprietary data with publicly available datasets
- Case studies and practical demonstrations
Workshop Part I: how can technological innovation enhance supervision?
In this session, the chair will introduce the topic. There will be three separate groups each discussing tools they are using and the challenges around these tools in their respective banks.
Workshop Part II: how can technological innovation enhance supervision?
In this session, each working group will report back on the discussion of their group. Each group will have 20 minutes.
Utilising software platforms and APIs in risk-based reporting
- What key features are necessary for effective risk-based supervision frameworks and strategies?
- The impact of APIs and software platforms on regulatory value chain
- Roles of machine learning, DLT and cloud in market surveillance and risk prediction
- Best practice for effective management in security standards and confidentiality
Cyber risk implications of crypto assets
- Key cybersecurity risks and vulnerabilities of crypto assets
- Increased dependency on third parties creating or amplifying cyber risks
- The need for effective cyber risk management frameworks
- Discussion: can existing risk management frameworks and regulations be made use of?
Project Rio: real-time market insight for central banks
- Using new tools to monitor markets
- Utilising streaming technology to meet central bank challenges
- Live demo of Rio project
Bigtech in fintech: the new focus of regulatory attention
- Defining the features of the bigtech sector and entities
- How has bigtech impacted financial services and technology providers?
- Outline of local and cross-jurisdictional efforts focused on regulation and supervision of bigtech
- Discussion: who are the bigtechs in the participants’ home jurisdictions
Outsourcing technology and managing potential risk
- Identifying areas of outsourcing and related risks and concerns
- Specific cloud service observations
- How can exposure to these risks leave central banks vulnerable when acting as overseers/supervisors?
- Requirements to resiliency and business continuity plans to prepare and manage these risks
Closing remarks and participant action plans
Concluding session led by the chair
- Summary of the course
- Discussion of the observed trends and case studies
- Application of learning points in the participants’ home organisations
- Preparation of action points
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