Fintech for compliance: #RegTechDr. Maciej PiechockiPartner, BearingPoint

@PiechockiMaciej

RegTech: the origin

The term RegTech was coined by:

a) a) Sandra Hering @ BearingPoint

b) b) Sir Mark Walport @ UK Treasury

c) c) Dr. Johannes Turner @ OENB

“RegTech is a sub-set of FinTech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities.” 1

“RegTech is the use of new technologies to solve regulatory and compliance requirements more effectively and efficiently.”2

1 Financial Conduct Authority (FCA) UK

2 Institute of International Finance (IIF)

RegTech: the problem

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There is no end in sight to the global regulation flood

0

5

10

15

20

25

30

35

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1975 1980 1985 1990 1995 2000 2005 2010 2015

Nu

mb

er o

f p

ub

licat

ion

s

B C B S P U B L I C AT I O N S S I N C E 1 9 7 5

Standards Guidelines Sound Practices Implementations Others n/a

Basel I Basel II Basel III

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Banking regulation is increasingly restricting banks’ business models

SREP

EMIR

Pillar ICapital requirementsLiquidity requirements

Pillar IIInternal Capital AdequacyInternal Liquidity Adequacy

Competitors

Markets

Basel 3.5

I CashII LoansIII ….

I DepositsII DebenturesIII ….

IV Own Funds

Assets Liabilities

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Hardly anybody is even close to BCBS 239 compliance

Self-assessment ratings by Principles (31 G-SIBs/D-SIBs, BCBS 307)BCBS 239, Principles for effective risk data aggregation and risk reporting

GS 7-11

P 3-6

P 2

P 1 • Corporate Governance

• Data architecture and IT infrastructure

• Risk data aggregation capabilities

• Risk reporting

BCBS 239

BCBS 239, Key requirements

• Data governance• Data consistency• Adaptability• Agility

BCBS 239 Deadlines

G-SIBs

2013 2014 2015 2016 2017 2018

???SIBs

???All

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Regulatory Reporting

External rating/risk weights

Regulatory topics are tapping into architectures of dependencies

CoRep

Risk Reporting

Accounting

BCBS 239

Open facilities/compensation

Collateral/risk mitigation

Own Funds Leverage Ratio

Liquidity

Large exposures / Loans

FinRep(incl. Forbearance and Non-performing exposures)

Statistics(BSI, MIR, SHS)

Asset En

cum

bran

ceAnaCredit

FRTB

Fun

din

gP

lans

ECB-/Eurex …Pool Processing

EMIRMIFIR

RegTech: the panacea

RegTech

When the whole is greater thanthe sum of the parts

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RegTech can do more than ‘just’ reduce the cost and complexity of compliance within the confines of a financial system that is increasingly acknowledged to no longer fully serve its purpose

What problem is RegTech solving?

Reducing the costsand complexity ofcompliance?

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The role of RegTech is to recreate trust, confidence and transparency

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Regulation and Technology evolve organically

Regulation Technology

RegTechGeo-political context

The geo-political, economic and social environment determines the direction their development takes

Social contextEconomic context

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Regulated institutions, supervisory authorities, regulatory utilities

RegTech is about the entire the Regulatory Value Chain

Data collection, regulatory analytics, anddissemination solutions for regulatorsAward- winning platform for central banksand supervisory authorities

Robust, multi-tenant platforms for intermediariesEnabling intermediary regulatory platforms providingservices to the industry

Risk, valuation and reporting solutions forfinancial servicesMarket leading risk, valuation, tax and regulatoryreporting solutions

Thank you

http://reg.tech

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Dr. Maciej PiechockiRegTech Management Board

BearingPointSpeicherstraße 160327 Frankfurt

maciej.piechocki@bearingpoint.com

T +49 69 13022 6167M +49 152 22860072

www.bearingpoint.com

https://reg.tech