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The HKMA's Global Regtech Challenge

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Background

Recognising Regtech’s pivotal role in revolutionising risk management and compliance, the Hong Kong Monetary Authority (HKMA) developed a two-year roadmap in November 2020. As laid out in a White Paper entitled “Transforming Risk Management and Compliance: Harnessing the Power of Regtech”, the roadmap aims to promote Regtech adoption in the Hong Kong banking sector and help build a thriving Regtech ecosystem. This competition, “Global Regtech Challenge”, is a key highlight in the roadmap.

The Global Regtech Challenge is created with the aim of further growing the Hong Kong Regtech ecosystem. Regtech providers from around the world are invited to take part to showcase how their solutions may be applied to the Hong Kong market to help solve common risk management and regulatory compliance pain points experienced by banks. The Global Regtech Challenge is supported by KPMG Hong Kong and KPMG Matchi.


The problems to solve

As part of the research conducted during the development of the White Paper, a set of problem statements reflecting challenges faced by the industry as a whole were identified with the most potential to benefit from further Regtech adoption. Specifically, they span across four Regtech application areas as defined within the White Paper: -


1. Governance, Risk and Compliance (GRC) – Maintaining an inventory of all internal and external compliance obligations

2. Conduct & customer protection – Product Due Diligence & Risk Rating

3. Conduct & customer protection - Customer data privacy

4. Risk Management – Stress Testing
How might we use technology to optimise regulatory compliance specifically related to:
  • Automating and streamlining the process of finding and assessing new regulations to be reviewed;

  • Making available an up-to-date list, accessible by all, of the relevant bank-wide regulatory obligations indicating responsibility and how those responsibilities will be met; and

  • Deliver assurance on and monitoring of the above-mentioned controls.

This will ensure institutions comply in full, while saving time and costs.
How might we use technology to support financial product developers as well as risk and compliance teams with their product due diligence and product risk rating assessments, specifically:
  • Data collection given product data can take many forms and the process of collection is not standardised;

  • Interpretation of requirements especially for complex products and from both the customer and the organisation (reputational) points of view;

  • Consistent Product Risk Rating modelling, ensuring standard application of relevant requirements across different products;

  • Maintenance of supporting platform and compliance process including ongoing product due diligence and risk rating assessments; and

  • Making real time product info e.g. risk ratings available to Relationship Managers and other frontline staff to ensure compliant selling process.

Ultimately the solution(s) will save product, risk and compliance teams time, and ensure compliance while protecting customers from being offered unsuitable products/ not receiving the relevant full disclosures.
With many data breaches occurring due to internal issues rather than external factors and with the significant increase in employees working remotely during the pandemic, how might we use technology-based solutions to help banks protect customer data and privacy especially in addressing increasing concerns around cyber risks and related regulatory compliance.

This problem statement is not concerned with monitoring for employee productivity purposes but rather, focused on employee security, risk and compliance aspects.

Some specific solution features could include:
  • Analyse anomalies around data access and usage;

  • Alert potential security breaches;

  • Detect leaks and prevent data loss/ notify relevant parties where appropriate; and

  • Remote data deletion/ recovery.
Stress testing in banks is strategically important and it is a requirement from regulators to model specific scenarios and report on the outcomes. A broad variety of risks are modelled at different frequencies including for example large exposures, market, liquidity, credit, reputational and strategic risk.

How might we, through a technology solution, support the delivery of the stress testing requirements by the different risk, compliance and business unit teams and reduce the resources required by for example:

  • Integrating and consolidating different requirements for coordinated stress testing result delivery;

  • Standardise outputs in a consistent manner and bring efficiencies to the stress testing processes; and

  • Consolidate data requirements for different stress tests and ringfence the datasets required to be managed and updated centrally for easy access when running the models.

Grow your footprint in Hong Kong:
Applications will be shortlisted by a panel comprising representatives from both the public and private sectors, including experts and leaders from the Regtech ecosystem, and each finalist will get an opportunity to:

• Participate in a 3 week Hong Kong Contextualisation Programme
Meet the local Regtech network and learn the nuances of the local market.

• Work with high-value corporates
Quantify the relevance and value of your solution in the Hong Kong market.

• Pitch your solution to industry specialists
Demo to leading banks in the Hong Kong Regtech ecosystem.

• Get exposure
Showcase your business and team at the HKMA's flagship Regtech event.

The deadline for submission is 16 April 2021 (Hong Kong Time).

Timeline

Process



Frequently Asked Questions

Q: Can I submit more than one application?

A: Yes, if your organisation has more than one solution and / or caters for multiple problem statements, you may submit an application to participate in each problem statement.

 

Q: Does my solution have to be launched to apply for this challenge?

A: Yes, only market ready solutions that are ready for a Proof of Value (POV) will be selected.

 

Q: How long will it take to complete my application?

A: Depending on the readiness of your marketing materials, the application form should take no longer than 45 minutes to complete.

 

Q: Do we need to travel to Hong Kong?

A: No, considering the pandemic situation, all activities including the applications, evaluations, Contextualisation Programme, pitching and winner announcement will be conducted virtually.


Q: How does the application process work?

A: To complete the application form, please login to Matchi and go here. If you are not yet a Matchi member, please register first and confirm your email address. Thereafter you can complete your application process. The end-to-end application process consists of 6 steps:
Application process




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