Financial Services Regulatory Insights - Technology

30 June 2021 Two forms of (digital) money and the future of UK Central Bank Digital Currency The BoE’s latest discussion paper on digital money calls for views on UK CBDC and private stablecoins.

15 June 2021 Artificial Intelligence in financial services: An evolving regulatory focus The global regulatory focus of AI is maturing, as regulators consider ethnical implications of AI adoption.

09 December 2020 The Markets in Crypto-Assets Regulation: Paving the way for change Change is coming with the EU’s proposed Markets in Crypto-Assets Regulation (MiCA) set to create a harmonised regulatory framework for crypto-assets and related services.

18 November 2020 Big changes for BigTech? Financial regulators sharpen their focus Until now the general position of regulators has been ‘same risk, same regulation’ Conor MacManus explores this state of affairs in his latest blog and questions if potential change is coming.

16 July 2020 Liability and AI: how to overcome the risks in financial services Who is to blame when your Artificial Intelligence (AI) system goes wrong? You thought you did everything right when setting it up. You established robust systems and controls, and set out who was accountable for its oversight. But now the regulators are knocking at the door and clients are demanding compensation.

18 March 2020 IFRS 17: What you missed from Oracle OpenWorld Last month’s EMEA Oracle OpenWorld was a great opportunity to explore how technology can solve the key challenges facing business today. As part of our role as sponsor, we co-hosted a client roundtable with Oracle on IFRS 17. We wanted to showcase how, when technology is approached with the right mindset, the solutions can go beyond simply meeting regulatory compliance to delivering finance transformation.

10 March 2020 European banks should note global disruption trends There are plenty of signals coming from the global banking sector that should give European banks pause for thought over their future.

28 January 2020 How will automation change the compliance function of the future? As the use of machine learning and robotics in financial services evolves, it raises a fundamental question about what the future holds for the compliance function. Against a backdrop of cost pressures and a changing regulatory landscape, many organisations are looking to automate manual activities. But could the compliance function ever become fully-automated?

22 January 2020 What does the regulatory revolution on data collection mean for firms? We are going through a revolution in the way financial services firms use data. The quantity and complexity of the data available to firms is unprecedented. This brings unique opportunities to better tailor the services provided to customers but also significant regulatory, operational and even ethical challenges.

03 December 2019 A journey towards responsible AI in financial services By Leigh Bates and Maria Axente The topic of ethical and responsible Artificial Intelligence (AI) in financial services has risen in popularity over recent years,...

04 September 2019 Trust me, I’m a robot - Explainable AI in Financial Services The Financial Conduct Authority (FCA) has signalled that firms should focus on achieving “sufficient interpretability”, essentially a compromise between AI functionality and the ability to clearly explain its decisions to stakeholders. While sensible, the definition itself raises a number of questions firms need to tackle. First, the level of explainability that will suffice is unclear. Decisions reached with the help of AI may be explainable to a firm’s Chief Digital or Data Officer, but would a retail customer understand the implications?

02 September 2019 Coming a cropper - Data farms and insurance fraud Amidst other significant enforcement activity, the Information Commissioner’s Office (ICO) recently reported raids on two UK addresses as part of an ongoing investigation, conducted in partnership with the Insurance Fraud Bureau (IFB), into the suspected illegal acquisition and sale of personal data. The suspicion was that high volumes of data farming activity, or vishing, was taking place at these addresses to illegally obtain the personal data of motor accident victims to sell on to solicitors for personal injury insurance claims. In the context of the ongoing fight against insurance fraud, this is an important development. In this blog I highlight three of the most important themes I took away from it.

14 August 2019 Evolution or Revolution? HMT fires the starting gun on its review of the UK’s future regulatory framework Whatever the UK’s relationship with the EU ends up looking like, it’s clear that the UK’s regulatory framework needs to adapt to the new reality. This is driven not just by the fact that the UK will no longer be subject to the EU’s regulatory framework (assuming the UK leaves the single market), but also because of the scale of change and disruption in financial services from technology, new players and changing demographics.

15 July 2019 Making the first move on technology for regulatory reporting quality assessments A speech by Mark Carney, the Governor of the Bank of England, in June 2019 stated that the Bank of England is launching a review to explore the transformation of the hosting and use of regulatory data over the next decade. This includes proofs of concepts to test how the Bank can automatically extract regulatory firm data. The speech clearly highlighted the Bank’s increased focus on exploring how Artificial Intelligence (AI) and Machine Learning (ML) technologies can be used to collect and interpret supervisory data from firms to minimise manual processes. The Bank aims to pull the data on demand from firms, making the regulatory reporting process more efficient and less expensive.

25 June 2019 With great computing power comes great accountability Scroll through a newsfeed nowadays and it’s difficult to avoid the latest take on innovative technologies such as Artificial Intelligence (AI), machine learning and advanced data analytics. These technological developments are beginning to disrupt the way in which financial services firms operate. A recent report by PwC shows that, while firms are at varying degrees of maturity in adoption, many are now embracing these technologies to transform activities such as risk management, fraud detection and post-trade processes. While these innovations are likely to be adopted by many within financial services, debate is growing around the disruptive power of new technologies and who is ultimately accountable for ensuring they are used responsibly.

06 June 2019 Cryptoasset regulation: clarity or conundrum? The growing popularity of cryptoassets poses a conundrum for regulators. Some have acted quickly with bans or bespoke regimes, while others are taking a more evidence-based approach and plan to reach a more considered view on the appropriate regulatory stance. But with cryptoasset products and associated activities increasingly crossing the boundaries into mainstream financial services, regulators around the world are under pressure to provide clarity over the application of existing regulation to this market. In the UK, authorities have attempted to do this but, how helpful have their efforts been?

04 March 2019 Why innovation is key to overcoming regulatory challenges in asset management During 2019, heightened regulatory scrutiny on investor transparency, combined with wider competitive pressures, may further squeeze profit margin for asset management firms. One obvious temptation may be to cut back and do less, but doing things differently is often a better way to overcome challenges. So what are the regulatory and wider strategic factors that will continue to drive this trend of compressed margin, and how can innovation help firms get ahead?

07 February 2019 Regulating cyptoassets: FCA’s next step towards promoting innovation By Suddankumar Subbaroyan On 23 January 2019, the FCA published its first consultation paper (CP) titled guidance on cryptoassets. The PwC licensing team supports and...

05 February 2019 Get set for hypertech: Why it’s time for life and pensions businesses to think bigger on technology The life and pensions industry is being transformed by data and technology innovations. As PwC explores in UK Life & Pensions: A roadmap to succeed in a fast-changing sector, a combination of data analytics, artificial intelligence and increasing computational capacity are paving the way for simpler products, reduced costs and sharper risk pricing. These developments can also boost innovation by making it possible to tailor customer solutions with greater precision and build and deploy new offerings with increased agility and speed.

29 January 2019 Technology Risk: Balancing innovation and risk Today’s technology risk landscape is an intimidating one – sector disruption and emerging technologies are transforming the Financial Services (FS) industry – and it’s up to the technology risk function to make sure that the risks associated with that transformation are being managed and mitigated appropriately.

23 January 2019 Bridging the care funding gap: Where purpose, opportunity and licence to operate align As people live longer and pressure on welfare spending increases, the challenge of how to fund long-term care is one of the most critical issues facing our country.

10 December 2018 IT risk: The function of the future By Mark Dury In late September, as dozens of senior FS IT risk professionals gathered for our annual conference, it suddenly struck me that two...

08 November 2018 Delivering digital change In an environment of rising regulatory and compliance costs, technological advances and increasing customer expectations, emerging regulatory technologies (‘RegTech’) have been heralded as a revolution for financial services firms looking to manage regulation more efficiently. Expected benefits include an improved customer experience, better business outcomes and the ability to manage risks in a more cost-effective manner. Given the current challenges stemming from manual business activities, poor data quality and a lack of holistic monitoring and risk analytics, it might be expected that firms would be rushing to implement RegTech solutions.

05 November 2018 What are the drivers to RegTech adoption in financial services? Organisations spend between $1- $5 million for every $1 billion in revenue on regulatory compliance. With the cost of compliance making up such a high share of revenue, it is no surprise that over-regulation remains a top threat to company growth across the world.

27 September 2018 Next generation outsourcing in the future of the life insurance and pension sectors: Building the platform for competitive transformation Across the life and pensions market, businesses are asking “how can we ensure that our operations are fit for the future?”

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