Hong Kong SFC to Launch ‘Regtech’ Project to Improve Financial Data Analysis

The watchdog is due to kick off a pilot fintech project next month to overhaul its data management process.

Hong Kong’s Securities and Futures Commission (SFC) is shortly due to launch a pilot fintech project as part of a wider plan to improve the way the watchdog monitors and detects systemic risk, according to sources quoted by Reuters today.

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The SFC will be joining forces with a sample group of 20 banks and an external technology firm in a bid to revamp the way it uses financial data.

Regtech

Fintech is a term used to describe the new wave of financial technology firms that are revolutionising the global financial services industry.

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Regulators and banks are increasingly using new technologies, such as artificial intelligence or data analytics, to address new regulations and better manage risk – an emerging phenomenon that has been dubbed ‘regtech’.

The SFC is seeking to improve on the way it analyses the data it gathers from financial firms and the market to spot risks such as product mis-selling or fraud.

Huge Volumes of Data

Regulators globally are increasing their efforts to identify systemic risks, but many are struggling to effectively analyse the growing volume of data they are gathering.

The SFC has reportedly been experiencing problems with different data sources, different formats and different time-intervals, spending a lot of time capturing and aggregating data when it would be more beneficial to allocate the time deriving insight from the data instead.

According to Reuters, Britain’s Financial Conduct Authority (FCA) has also been promoting the development of ‘regtech’ to help address a range of regulatory challenges, including data management as well as combating money laundering and cyber risk.

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