The Emergence of Regtech 2.0: From Know Your Customer to Know Your Data

(2016) 44 Journal of Financial Transformation 79

UNSW Law Research Paper No. 17-63

20 Pages Posted: 2 Oct 2017

See all articles by Douglas W. Arner

Douglas W. Arner

The University of Hong Kong - Faculty of Law

Janos Nathan Barberis

The University of Hong Kong - Faculty of Law

Ross P. Buckley

University of New South Wales (UNSW) - Faculty of Law

Date Written: January 1, 2016

Abstract

The regulatory changes and technological developments following the 2008 Global Financial Crisis are fundamentally changing the nature of financial markets, services and institutions. At the juncture of these two phenomena lies regulatory technology or ‘RegTech’ – the use of technology, particularly information technology, in the context of regulatory monitoring, reporting and compliance.

RegTech to date has focused on the digitization of manual reporting and compliance processes, for example in the context of know-your-customer requirements. This offers tremendous cost savings to the financial services industry and regulators. However, the potential of RegTech is far greater – it could enable a close to real-time and proportionate regulatory regime that identifies and addresses risk while also facilitating more efficient regulatory compliance.

We argue that the transformative nature of technology will only be captured by a new approach that sits at the nexus between data, digital identity and regulation. The development of financial technology (‘FinTech’), rapid developments in emerging markets, and recent pro-active stance of regulators in developing regulatory sandboxes, represent a unique combination of events, which could facilitate the transition from one regulatory model to another.

Keywords: 2008 Global Financial Crisis, GFC, financial markets, RegTech, FinTech, reporting and compliance processes, regulators, risk

Suggested Citation

Arner, Douglas W. and Barberis, Janos Nathan and Buckley, Ross P., The Emergence of Regtech 2.0: From Know Your Customer to Know Your Data (January 1, 2016). (2016) 44 Journal of Financial Transformation 79; UNSW Law Research Paper No. 17-63. Available at SSRN: https://ssrn.com/abstract=3044280 or http://dx.doi.org/10.2139/ssrn.3044280

Douglas W. Arner

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

Janos Nathan Barberis

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

Ross P. Buckley (Contact Author)

University of New South Wales (UNSW) - Faculty of Law ( email )

Sydney, New South Wales 2052
Australia

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