[eBook Code] The REGTECH Book (eBook Code, 1st)

A FinTech and RegTech Overview: Where We Have Come From and Where We Are Going vi

About the Editors xii

Acknowledgements xiv

1. Introduction

What a RegTech Compliance Killer System Will Look Like 6

Technology-Enabled Collaborative Compliance 10

The Age of RegTech Disruption to the Status Quo Is Here 16

RegTech and Financial Crime Prevention 20

RegTech: Tackling Regulation with Innovation 26

Identities, the RegTech Holy Grail 30

2. The RegTech Landscape

Islamic RegTech 38

How RegTech Could Help Determine the Future of Financial Services 44

Introducing the RegTech Quality Compass: The Five Factors of RegTech Quality 50

How Banks Are Managing Their Risk Through Technology and Market Infrastructure 55

RegTech and the Science of Regulation 58

GDPR and PSD2: Self-Sovereign Identity, Privacy, and Innovation 62

Rise of RegTech in the German Market 66

The Power of RegTech to Drive Cultural Change and Enhance Conduct Risk Management Across Banking 70

3. Regulatory Innovation and Sandboxes

Discover the Innovative Technology Behind RegTech Leaders 80

Enabling RegTech Up Front: Unambiguous Machine-readable Regulation 85

Align Open Banking and Future-Proof RegTech for Regulators and Third-Party Providers to Deliver the Optimal Consumer Convenience and Protection 89

A Seat at the Table – Bringing the Voice of FinTech to the US Regulatory Process 93

Sandbox Games for RegTech 99

Legal Guidance for Entering the Sandbox and Taking Advantage of Cross-Border Cooperation Agreements 102

RegTech and the Sandbox − Play, Innovate, and Protect! 106

4. A Call for Innovation or Disruption?

Governance, Risk, and Compliance: Complex or Complicated? 118

Innovation or Disruption: Not Always Black and White 122

How to Use Digital Marketing Data in Regulated Industries 126

Invention Versus Reinvention 130

Making Regulation Machine Readable 134

Can We Digitize Know Your Client? 138

5. RegTech Investment and Compliance Spending

Why a Substantial Investment in Financial Services RegTech Now Will Strategically Reduce Your Future Regulatory Compliance Costs 146

Old Tech + New Tech = RegTech: Excel Spreadsheets and End User Computing in a Regulated World 150

Will Financial Institutions Ever Achieve a 100% Compliance with Anti–Money Laundering and Combating the Financing of Terrorism Rules? 154

Merits and Demerits of a Shared Risk Engine 158

Spend on Compliance: A Necessary Evil orBusiness Enabler? 163

6. RegTech for Authorized Institutions

RegTech Opportunities in a Post-4MLD/5MLD World 172

Passporting in the EU – Is an Opportunity Also a Problem? 177

What Do PSD2 and Similar Activities Mean for Banks and FinTech Start-ups? 181

7. RegTech from a Regulatory Perspective

The Role of Anti–Money Laundering Law and Compliance in FinTech 190

Banking Supervision at a Crossroads – RegTech as the Regulators’ Toolbox 195

FinReg, FinTech, and RegTech – Quo Vadis, EU? 199

The RegTech Landscape from a Regulator’s Perspective 205

RegTech is for Regulators Too, and its Future is in

Emerging Markets 210

8. Blockchain and AI in RegTech

The ROI of RegTech 218

The Augmented Compliance Office 221

Dissolving Barriers: A Global Digital Trust Protocol 226

Can AI Really Disrupt Monitoring for Suspicious Activity? 231

Forging a Responsibility and Liability Framework in the AI Era for RegTech 235

Compliance with Data Protection Regulations by Applying the Blockchain Technology 246

Blockchains Are Diamonds’ Best Friend: The Case for Supply Chain Transparency 250

9. RegTech Applicability Outside the Financial Services Industry

Protecting Consumers and Enabling Innovation 260

RegTech Impact on the Private Security Industry 263

ArtTech: How Blockchain Can Improve Provenance 266

The Potential of RegTech in Improving the Effectiveness of Environmental Regulation 270

RegTech Applicability Outside the Financial Services Industry 274

Using RegTech as a Cross-Industry Digitization Tool 278

RegTech Unleashed: Discovering the Pathways Beyond Finance 282

RegTech Outside Finance: Four Options, One Clear Choice 287

RegTech: A Safe Bet for Tackling AML and Fraud in the Gambling Sector 292

10. Social Impact and Regulation

The FinTech Ecosystem Between Legal Compliance and Social Dimension 300

The End Justifies the Means: Putting Social Purpose Back at the Heart of Banking and Financial Regulation 305

RegTech’s Impact on Trust and Identity 310

How Technology Is Driving Financial Inclusion 314

Banking the Unbanked and Underbanked: RegTech as an Enabler for Financial Inclusion 318

Superhero Way: Enhancing Regulatory Supervision with Superpowers 323

11. The Future of RegTech

Market Surveillance 2020 330

I Regulate, Therefore I Am? Regulating Humans’ and Machines’ Conduct and Culture 335

The Future of RegTech 340

From RegTech to TechReg – Regulation in a Decentralized World 344

Emerging Innovations in RegTech 348

List of Contributors 351

Index 358