The Central Bank of Russia has published a consultation paper about the development of RegTech and SupTech.
In the advisory report ‘Problems and directions of development of regulatory and Supervisory Technologies (RegTech and SupTech) on the Financial Market in Russia’, the bank lists a number of benefits of the technology.
For instance, financial organisations can streamline the regulatory compliance process, including reporting, speed up and improve the reliability of customer identification procedures, improve the quality of transaction analysis, and provide risk control and counter cyber threats.
The bank also said it SupTech technologies can allow regulators to automate and simplify administrative procedures, translate tools for interacting with financial market participants into digital format, improve the decision-making support system, and reduce their own costs for performing supervisory functions.
In the report, The Bank of Russia has invited market participants to answer which of the proposed regulatory changes can be optimised through the use of digital tools (cloud technologies, machine learning, centralized data collection and processing tools, etc.).
It is also asking for comments on which areas of regulation RegTech will be most relevant and SupTech, in what form of cooperation between banks, developers and the regulator should these projects be implemented.
Market participants are also invited to discuss the issue of eliminating legislative problems in the process of preliminary testing of new technologies, which can take place at a specially created Bank of Russia site – the regulatory sandbox.
The Bank of Russia is already implementing a number of projects including daily collection of banks’ transactional data, automating the process of calculating and monitoring compliance with mandatory ratios, creating a collateral register on a single platform to reduce credit risks, creating a unified register of deposits to protect interests of investors and others.
The regulator is also working on initiatives to introduce in the future elements of regulation and supervision using new technologies: digitalization of regulatory requirements and creation of a digital database of supervisory documents, as well as the digitalization of compliance procedures.
In addition, the regulator said it is also planning a number of initiatives that expand the use of RegTech and SupTech tools with the Bank of Russia validation and control models in supervised institutions.
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