The regtech committees of the fintech associations of Hong Kong, Singapore and Japan have jointly launched the ‘APAC RegTech Network’, an initiative to enhance cross-border collaboration on regtech education and implementation across the Asia Pacific region.
Under the initiative, the regtech committees of the FTAHK (Fintech Association of Hong Kong), SFA (Singapore Fintech Association) and FTJ (Fintech Association of Japan) will jointly convene regular meetings, and increase dialogue and information exchange to combat financial crime.
The APAC RegTech Network was launched on 30 May 2019, in conjunction with the launch of the SFA’s regtech sub-committee, chaired by the CEO and co-founder of two major regtech firms.
The SFA has also signed an MoU with Australia’s RegTech Association to better engage with the regtech ecosystem in the region.
FTAHK’s regtech committee has been active since the association was launched nearly two years ago. It convenes monthly meetings, regularly organises curated demos from regtech firms, and has co-organised the first legal tech and regtech hackathons in Hong Kong.
The aim is to stay vigilant. As digital transformation grows more advanced with ever-increasing velocity, innovation in regulatory technology is also a result of this.
The aim is to operationalise already executed MOUs through focused cross-border engagement. The committees will start with periodic online meetings between the regtech committees, aimed at fostering education and implementation of regtech through sharing insights on regulatory developments and emerging technology solutions.
Other regtech committees from other associations have been encouraged to join, as the aims are to grow its network and work together to combat financial crime across the APAC region.
The launch of the APAC RegTech Network follows other initiatives aimed at boosting cross-border collaboration in fintech development, such as the GFIN (Global Financial Innovation Network).
The GFIN is a global “sandbox” launched this year to facilitate cross-border testing of fintech and regtech offerings. Eight firms have so far passed the initial screening under the initiative.
Also launched this year was the ‘Asia-Pacific FinTech Network’, which included MOU signatories from nine fintech associations – the FTAHK, SFA, FTJ, and associations from Australia, Malaysia, Philippines, Taiwan, Thailand and MENA.
Within Hong Kong, itself regtech innovations have been in the process for a while now.
In October 2018, OpenGov Asia reported that in order to help develop a regtech ecosystem, the Hong Kong Monetary Authority will open a fintech “supervisory ‘sandbox’ to regtech projects or ideas raised by banks and technology firms, expected to be effective soon.
The sandbox – a highly controlled environment used to test unverified ideas – will allow the banks and their technology partners to conduct pilot trials of newly developed technology, without the need for full compliance.
The development and use of regtech by banks to achieve regulatory compliance and automate risk management has grown in recent years.
The use of regtech for surveillance, in particular, has grown rapidly as part of anti-money-laundering and anti-terror financing measures.
The HKMA initiatives will also spearhead the use of regtech for prudential risk management, as well as the use of technologies related to machine-readable regulations and supervisory processes and activities.
The deputy chief of HKMA said that the number of suspicious transactions reported by Hong Kong banks had grown on average by 40 per cent annually over the past five years; some banks were using machine learning and artificial intelligence to help detect suspicious behaviour and patterns, which had freed up analysts to focus on high-risk cases.
In this way, Hong Kong and nations across the APAC region are investing more resources into the development of better regulatory technology to help combat cyber and financial crime.