There aren’t many areas that artificial intelligence (AI) won’t help in one way or another, and the financial services industry is no different. Yes, it may be an age-old industry that’s based on traditional values and practices, but it too is moving with the times as more companies learn to embrace the likes of AI. The Financial Conduct Authority (FCA) is one such company.
“We are looking at the extent to which we can make parts of our handbook initially machine-readable and then fully machine-executable….Effectively converting, probably initially our regulatory reporting rules, into truly unambiguous rules that machines can interpret and implement directly,” said Nick Cook, the FCA’s head of data and information operations. “The idea that we can put out rules which are written manually in ways that can be fully and unambiguously interpreted by machines.”
One area of the fintech industry that experts anticipate could reduce the cost of regulatory compliance across the board by as much as $80 billion worldwide. “There’s a whole series of steps in making this happen, and we’re working on it quite intently at the moment,” advised Cook.
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“We have a huge amount of programs and initiatives at the moment, and they range from better use of things like speech-to-text analytics tools within the FCA, through to how we make better use of social media analytics and media analytics, through to how we use financial processing tools to automate some of our processes.”
Cook also advised how the FCA was working in conjunction with global regulators and regtech firms to learn from and showcase its own achievements. “A lot of Fintech over the last year has been looking into regtech’s application for ourselves as well, and encouraging and bringing other international regulators to the table. We take a very active role in trying to expand the regtech discussion globally. Equally though, we seek to learn what’s going on elsewhere.”
The budding industry of regtech is capable of “addressing risk in real-time ad increasing the efficiency of compliance” wrote University of Hong Kong researchers in a report published last October. “It has the potential to enable a close to a real-time and proportionate regulatory regime that identifies and addresses risk while also facilitating far more efficient regulatory compliance,” confirmed Cook.