Australian regulators weekly wrap — Monday, 27 January 2020

Keeping on top of the latest financial services regulatory & compliance trends?

Investing time in your professional development within a rapidly changing financial services industry is challenging. To meet that challenge, the Australian regulators weekly wrap is designed to keep you at forefront of your practice by quickly setting out the top 5 developments from the past week, analysis and practical considerations for the future.

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Thought for the future: the volume and complexity of regulation is increasing, in particular in financial services with its focus on principles-based laws / personal liability. As are the penalties for getting it wrong. Companies, especially smaller ones, are struggling to keep up and spending increasing amounts of money on legal and compliance. Technological solutions not only offer a way to comply with the increasing demands, but also to enhance businesses. The regulators are also adopting technology at pace (see an AFR article on 22 / 1 that I commented on here in this regard). Traditional RegTech using Robotic Process Automation, Big Data Analysis, AI, and Machine Learning has focused on 5 categories; 1) compliance e.g. AI searching for new regulations; 2) identity management e.g. AI-assisted KYC; 3) risk management e.g. fraud detection; 4) regulatory reporting; and 5) transaction monitoring. My sense is that more bespoke applications will start to arise, based on major new laws. Take FAR (formerly BEAR) for example. Given that APRA will be able to veto directors / executives where it holds information which conflicts with that person’s obligation to demonstrate “integrity” etc, RegTech applications which can crawl public and semi-public domains to obtain information that will assist in the due-diligence vetting process is not so far-fetched a possibility. Arguably a touch “black mirror” though…

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(These views are my own and do not constitute legal advice. Photo credit Tom Wheatley)

AU financial services lawyer in compliance, regulatory & disputes. Email sign-up: http://eepurl.com/gG9Kk1 and LinkedIn: https://www.linkedin.com/in/lthennessy/