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Print articleHong Kong Monetary Authority (“HKMA”) Develops Two-Year Roadmap to Promote Regtech Adoption
November, 2020 - Deacons
The HKMA has developed a two-year roadmap to promote Regtech adoption in the Hong Kong banking sector (“Roadmap”), as set out in a White Paper entitled “Transforming Risk Management and Compliance: Harnessing the Power of Regtech” (“White Paper”).
The White Paper presents the case for wider adoption of Regtech in Hong Kong, outlining a series of actions that the HKMA will take, or consider taking, to accelerate its adoption. The White Paper is based on information collected from local banks, Regtech providers, local and overseas regulators and other industry stakeholders. The extensive research culminated in the formulation of 16 recommendations across five core areas: -
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(i) |
boosting awareness by issuing practical guidance and organising targeted events; |
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(ii) |
promoting innovation among local and global Regtech community and facilitating access to infrastructure; |
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enhancing regulatory engagement with the Regtech ecosystem through ongoing dialogue and collaboration; |
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(iv) |
developing a talent pool by formalising a Regtech training and skills framework; and |
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sustaining adoption via continued industry engagement and effective tracking of progress. |
To implement the recommendations, the HKMA will roll out a series of events and initiatives in the coming two years, including:
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(i) |
hosting a large-scale event to raise the banking sector’s awareness of the potential of Regtech; |
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launching a Regtech Adoption Index; |
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organising a Global Regtech Challenge to stimulate innovation; |
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(iv) |
publishing a “Regtech Adoption Practice Guides” series; |
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(v) |
creating a centralised “Regtech Knowledge Hub” to encourage information sharing; and |
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(vi) |
establishing a Regtech skills framework to develop talents. |
Notable findings of the White Paper include the following:
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(i) |
the effective implementation of Regtech solutions can reduce cost, improve risk management and increase efficiency for banks, as well as enhance supervision for regulators; |
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one-third of the surveyed banks have fully implemented at least one Regtech solution; and |
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(iii) |
budgetary and capability constraints, and the lack of available and established solutions catering to local requirements are the main adoption challenges for banks and Regtech providers. |
The White Paper is accessible here: link.
A speech by the Deputy Chief Executive of the HKMA on the Roadmap and the White Paper is accessible here: link.
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