Once again, the topic of RegTech adoption was at the centre of Hong Kong FinTech Week.
On the first day of the event’s 2020 edition, the Hong Kong Monetary Authority, in collaboration with KPMG, released release an extremely insightful white paper to explore the current state of RegTech in Hong Kong, examine common practices and barriers to implementation, and outline a roadmap to accelerate adoption in the banking sector.
The sixty-nine-page report represents a turning point for regulators globally, due to the clarity and decisiveness with which it takes a stance and provides guidance for industry practitioners regarding RegTech adoption.
- The report makes it clear that there are plenty of opportunities for expansion and further innovation. In fact, only 32% of the surveyed financial institutions have already implemented a RegTech solution fully.
- Without the RegTech infrastructure operating in the background, FinTech organisations would not be able to provide the outstanding customer experience that distinguishes them.
- Misconceptions about RegTech benefits and regulators’ view of cloud-based technologies still represent a barrier to widespread adoption, and as such need to be addressed and clarified.
- New initiatives such as potential financial incentives and the introduction of a new RegTech Adoption Index have huge potential as they would provide a more holistic and balanced framework to evaluate adoption and signal the regulator’s commitment in this area.
This unprecedented declaration of support for RegTech by the HKMA outlines a clear step-by-step plan to foster greater RegTech adoption across financial services. The timing of the circulation of this report – during Hong Kong Fintech Week – is a clear demonstration of the critical role that RegTech plays in the FinTech ecosystem.
Our CEO Claus Christensen has shared his analysis of the HKMA white paper in a dedicated article for Finextra, available here.