《Kapronasia：2022年普惠金融監管和監督技術研究報告（英文版）（50頁）.pdf》由會員分享，可在線閱讀，更多相關《Kapronasia：2022年普惠金融監管和監督技術研究報告（英文版）（50頁）.pdf（50頁珍藏版）》請在三個皮匠報告上搜索。

1、SPECIAL REPORTREGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONEXECUTIVE SUMMARY3INTRODUCTION5REGTECH AND SUPTECH FOR FINANCIAL INCLUSION -KEY THEMES81.Consumer protection and market conduct122.Data-driven financial system stability143.Data collection and management164.Detection and pr

2、evention of financial crimes185.Remote supervision and reporting206.Financial inclusion for disadvantaged groups and women21TECHNOLOGY CHOICES24POLICY FRAMEWORK ON REGTECH FOR FINANCIAL INCLUSION28Step 1:Analyze the local context30Step 2:Assess capabilities33Step 3:Engage stakeholders35Step 4:Design

3、36Step 5:Implement36Recommendation:Enact gender-transformative approaches37USE OF REGTECH AND SUPTECH DURING EMERGENCIES38CONCLUSION41GLOSSARY42General terminology42RegTech and SupTech technology terminologies43List of abbreviations44REFERENCES46APPENDIX48 2022(February),Alliance for Financial Inclu

4、sion.All rights reserved.CONTENTSACKNOWLEDGMENTSThis special report is a product of the taskforce made up of the Digital Financial Services Working Group(DFSWG),the Global Standards Proportionality Working Group(GSPWG),the Financial Inclusion Data Working Group(FIDWG)and its members.Contributors:We

5、would like to thank the following AFI working group members,member institutions and partners who provided qualitative insights through contributions and in-depth interviews:Linda Dlamini-Khumalo(Central Bank of Eswatini),Fatoumata Mayaki and Nimrod Payne(Banque Centrale des tats de lAfrique de lOues

6、t),Brou Kouame Patrice(Ministry of Economy and Finance,Ivory Coast),Aktham Abuassi(Central Bank of Jordan),Dr Settor Amediku and Clarence Blay(Bank of Ghana),George Gould Sr(Central Bank of Liberia),Temitope Olumuyiwa(Central Bank of Nigeria),Mutashobya Mushumbusi(Bank of Tanzania),James Rwagasana(N

7、ational Bank of Rwanda),Dr Eulade Rugambwa(National Bank of Rwanda),Mynard Mojica(Bangko Sentral ng Pilipinas),Alejandra Olivares Castorena and Marco Antonio Del Ro Chivardi(Comisin Nacional Bancaria y de Valores CNBV Mexico),Nishchal Adhikari(Nepal Rastra Bank),Christopher Calabia and Anna Wallace(

8、Bill&Melinda Gates Foundation),Alvinder Singh(Monetary Authority of Singapore),and Elisabeth Noble,Piers Haben,Slavka Eley(European Banking Authority).From the AFI Management Unit:This deliverable was led by Adeyemi Omotoso(Policy Specialist,Inclusive FinTech)with contributions from Ghiyazuddin Moha

9、mmad(Senior Policy Manager,Digital Financial Services),Luis Trevino(Senior Policy Manager,Financial Inclusion Data and In-country Implementation)and Robin Newnham(Head,Policy Analysis).This report was commissioned by the AFI Management Unit.The research was conducted and drafted by Kapronasia Pte Lt

10、d,a leading Asia FinTech-focused strategic consulting firm.We would also like to thank AFI member institutions,partners and donors for generously contributing to the development of this publication.Futuristic high-tech computer network concept with artificial intelligence.(aislan13/iStock)3REGULATOR

11、Y AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONThis report recommends a five-step policy framework to help regulators adapt these RegTech and SupTech innovative solutions to the specific needs and context of their jurisdictions:1.Analyzing the local context;2.Assessing internal capabilities a

12、nd resources;3.Engaging and collaborating with relevant demand and supply-side stakeholders;4.Identifying and designing necessary RegTech and SupTech solutions and processes;and5.Implementing solutions.In this report,six key thematic focuses have been identified as proxies for an inclusive regulator

13、y and supervisory regime delivered through technology-enabled innovations.More on page 4These themes are explored to establish linkages and opportunities for RegTech and SupTech to add and create value in regulatory reporting and compliance methods,processes,and overall supervision outcomes,hence,co

14、ntributing to an inclusive and sustainable financial ecosystem.In conclusion,this framework is anchored on practical insights to help AFI members design,develop,adopt,and adapt SupTech and RegTech initiatives for different and relevant thematic requisite areas to promote financial inclusion.For thes

15、e to be successful,collaboration and active stakeholder engagement will be of utmost importance.EXECUTIVE SUMMARYFinancial inclusion is one of the primary goals for financial regulators worldwide.As a result,many countries have made considerable strides in increasing access to formal finance to the

16、unserved and underserved populations.However,many remain financially excluded.But today,digital financial services(DFS),Financial Technologies(FinTechs)and other non-bank entrants are rapidly changing the narrative on financial services access,usage,and quality across all consumer segments,including

17、 the financial industrys evolution driven by innovation and great potential to improve financial inclusion.Nevertheless,these technology-enabled innovators and financial service providers(FSP)come with a set of emerging challenges and concerns for regulators,such as cybersecurity threats,data securi

18、ty,privacy and protection,money laundering/terrorism financing(ML/TF)risks,complexities and inefficiencies around supervision and regulatory compliance or reporting,and particularly the necessity for financial regulators to develop capabilities and adopt tools for effective and efficient regulation

19、compliance,supervision and oversight outcomes.To address these challenges and solve the capability conundrum,AFI member countries and regulators worldwide are turning to regulatory and supervisory technologies(RegTech and SupTech)powered by different technologies and technological capabilities such

20、as artificial intelligence/machine learning(AI/ML),cloud computing,blockchain technology,data analytics,and adapting these innovations to their local contexts and unique needs to achieve improved regulation compliance methods,efficient supervision processes and effective oversight outcomes which are

21、 necessary pillars to sustain and accelerate financial inclusion.Based on researches,in-depth analysis and use cases of regulators within the AFI network and beyond already adapting RegTech and SupTech in a number of thematic areas.4REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTABL

22、E 1:KEY THEMATIC AREAS FOR REGTECH AND SUPTECH FOR FINANCIAL INCLUSIONCONSUMER PROTECTION AND MARKET CONDUCTEnhancing the financial regulators ability,methods,and processes to build and strengthen an inclusive financial ecosystem that exemplifies public confidence,trust,responsible business conduct,

23、fair treatment,and protection of consumers.DATA-DRIVEN FINANCIAL SYSTEM STABILITYEnabling financial authorities,promoting an agile,sound,and efficient financial system to withstand adverse economic cycles,disruption or shocks via data-driven insights,robust sentiment analysis,risk management and tec

24、hnology-enabled innovative forecast and predictions.DATA COLLECTION AND MANAGEMENTHelping identify,collect,standardize data,ensuring dataset fidelity and quality,safety store,analyze,and draw insights for effective decision-making to address challenges with disproportionately excluded segments such

25、as women,older people,forcibly displaced persons(FDPs),or any market segment of interest in real time.DETECTION AND PREVENTION OF FINANCIAL CRIMESEquipping regulators to leapfrog deficiencies in money laundering and terrorism financing(ML/TF)compliance,counter inefficiencies in fraud controls and go

26、vernance,overcome costly passive and manual processes,address insufficient resources for monitoring and high dependencies on human judgement.REMOTE SUPERVISION AND REPORTINGCreating tools,methods and processes that enhance exceptional regulation compliance,comprehensive supervision and oversight out

27、comes at lower costs,greater efficiency,reduced or eliminated mobility constraints for both regulators and the regulated.FINANCIAL INCLUSION FOR DISADVANTAGED GROUPS AND WOMENImproving financial stability,customer engagement,and sound regulatory environment by addressing the barriers to financial in

28、clusion for women,older people,youth,internally displaced persons(IDPs)or FDPs and other disproportionately excluded segments.5REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONINTRODUCTION The financial services industry is evolving rapidly and has gone through tremendous change in the

29、 past decade,with non-bank entrants gaining significant traction globally.As many emerging economies strive to accelerate financial inclusion*,especially for vulnerable groups such as women,youth,micro,small and medium enterprises(MSMEs),FDPs,and those living with a disability,the introduction of di

30、gital financial services(DFS)have proven to be a game-changer by helping individuals and businesses access and use financial services with ease.This paradigm shift in the industry presents new regulatory and supervisory challenges for regulators.For example,they need to comprehend and mitigate preva

31、iling and emergent risks associated with technology such as cybersecurity,anti-money laundering/combating the financing of terrorism(AML/CFT),fraud detection,compliance reporting,outsourcing,and use of third parties.In addition,as the regulators work on their broad mandate to ensure monetary and fin

32、ancial stability,expanding access through responsible usage of DFS for the under and unserved market segments has become imperative.Regulatory(RegTech*)and Supervisory Technology(SupTech*),though not new ideas,are receiving growing interest from financial regulators across the world especially from

33、emerging and developing market economies(EDMEs)that make up the Alliance for Financial Inclusion(AFI)network.Regulators are actively adopting RegTech and SupTech,as regulated financial sector actors such as banks increasingly transform several facets of their operations,delivery,regulatory complianc

34、e and reporting through digitization.It is important to note that many countries,including AFI member institutions in countries such as Ghana,Mexico,Nepal,Nigeria,Philippines,and Rwanda,have piloted RegTech and SupTech solutions to address different challenges or explore various use cases.Our focus

35、in this report is to explore and investigate these pilots and implementations across the globe,with a specific emphasis on AFI member countries.In the following sections,we will discuss the research objectives and methodology,present the key themes identified and their intersection with financial in

36、clusion,cite relevant country examples and use cases,highlighting how RegTech and SupTech can be an effective response tool and utility during emergencies.Finally,we will discuss policy recommendations through a framework to guide financial regulators on how to adopt and implement RegTech and SupTec

37、h solutions,with clear considerations for promoting financial inclusion.REGTECH,SUPTECH AND FINANCIAL POLICYMAKINGWe start with a RegTech and SupTech analysis and their intersection with financial policymaking to better understand how they can add value at different stages of financial policies and

38、regulation formulation;the lifecycle of policymaking is analyzed through the lens illustrated below.While RegTech and SupTech play a huge role across the regulatory policymaking process,they can also offer critical value to enhance data collection,its frequency,degree of granularity and quality,and

39、subsequently support the analysis to draw insights for any policy to be inclusive(representative of all segments),actionable and successful.1 It is worth noting that this is not a one-time set and forget-it approach.Indeed,financial ecosystems are constantly in flux,thus this framework needs to be r

40、egularly reviewed.1 Gurung,Nora and Perlman,Leon,Use of Regtech by Central Banks and its impact on financial inclusion(November 16,2018).Available at:https:/ AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTABLE 2:POTENTIAL IMPACT OF REGTECH AND SUPTECH ON THE POLICYMAKING LIFECYCLE FIGURE 1:POL

41、ICYMAKING LIFECYCLE(SOURCE:KNILL AND TOLSUN,2008)2 POLICYMAKING LIFECYCLE STAGE POTENTIAL IMPACT OF REGTECH AND SUPTECH AGENDA SETTING The first stage of the policy lifecycle involves the identification of policy problems and the subsequent goal setting for the regulators.As they look to understand

42、the market situation,regulators are increasingly keen to be able to identify industry changes in near-real time.Through the collection and analysis of real-time data,RegTech and SupTech hold the potential to help regulators have a more clear and holistic view of the current market dynamics and predi

43、ctive capabilities for probable future outcomes.POLICY FORMULATIONLeveraging the big data analysis,insights and potential improvements to processes,methods,and tools through RegTech solutions,regulators are able to have a more proactive policy response to immediate market changes and ensure that pol

44、icy decisions are inclusive.POLICY ADOPTIONRegTech solutions can help regulators ensure that market participants are compliant with policy changes by lowering compliance and reporting costs,reducing,or eliminating process bottlenecks and introducing efficiencies across the chain.In addition,SupTech

45、can help flag unintended policies and initiatives consequences through the collection of more granular datasets such as sex-disaggregated data,consumer satisfaction rates with DFS,etc.POLICY IMPLEMENTATION Preliminary evidence of RegTech and SupTech interventions and use cases in consumer protection

46、,complaint handling,and broader redressal mechanisms shows more potential not only improving the implementation of regulations,but also in protecting consumers interests.This is an indication of the enormous potential of SupTech and RegTech for both micro and macro,online and offline supervision and

47、 oversight.MONITORING AND EVALUATIONMonitoring and Evaluation(M&E)is a critical element in any policymaking process.RegTech and SupTech have tremendous potential to improve the evaluation process by automating processes and enabling real-time M&E.POLICY FORMULATIONAGENDA SETTING POLICY IMPLEMENTATIO

48、NMONITORING AND EVALUATION POLICY ADOPTIONMARKET AND CONSUMER DATA COLLECTION,ANALYSIS AND INSIGHT123452 Knill and Tolsun,2008.The policymaking lifecycle.Available at:https:/ AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSION How do regulators approach prototyping,testing,and deployment of financi

49、al inclusion-focused RegTech and SupTech solutions?What technology options are considered?What barriers or challenges do regulators and regulated entities need to overcome to adopt and adapt RegTech and SupTech innovations,technologies,businesses and process models?Identification of specific challen

50、ges and risks associated with RegTech and SupTech solutions and their development and deployment,highlighting those around financial inclusion;Implications for regulators and regulated entities.IN CONCLUSION,insights and recommendations drawn from the research will inform the development of a framew

51、ork of practical insights and approaches anticipated to support AFI member countries design,develop,adopt,and adapt RegTech and SupTech initiatives for different and relevant use cases that contribute to the success of their financial inclusion goals.WHY REGTECH AND SUPTECH FOR FINANCIAL INCLUSION?R

52、esponding to the rapidly evolving demands in the digital age,financial regulation and supervision need to convert from analog to digital design as appropriate and necessary.Accordingly,this report seeks to explore opportunities around RegTech and SupTech as policy interventions to improve financial

53、inclusion and provide policy recommendations and guidance to support and empower financial regulators.Ultimately,this report is expected to aid financial regulators and policymakers as they explore,consider,adopt,and implement RegTech and SupTech innovations without compromising the integrity,safety

54、,and efficient functioning of their financial systems.Some of the key questions the report aims to answer include:What are RegTech and SupTech solutions?What do they cover?How can RegTech and SupTech for financial inclusion be measured?What emerging themes are significant indicators for RegTech and

55、SupTech for financial inclusion?FIGURE 2:RESEARCH METHODOLOGY FOR REPORTING ON REGTECH AND SUPTECH FOR FINANCIAL INCLUSION Source:Source:AFI and KapronasiaHISTORICAL AND CURRENT LANDSCAPE DIAGNOSIS Literature Reviews Case studies Identification of emerging trends and use casesANALYSIS FOR FINANCIAL

56、INCLUSION AND DATA VALIDATION AFI member interviews Developed country interviews Strategic industry stakeholder interviews Data analysis through the financial inclusion framework -key themesINSIGHTS AND RECOMMENDATION Inputs and insights from AFI technical team and management unit Consulting teamTO

57、ACHIEVE THIS OBJECTIVE,A THREE-STEP RESEARCH PROCESS IS CONSIDERED:8REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONREGTECH AND SUPTECH FOR FINANCIAL INCLUSION KEY THEMES9REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONWhile the financial services industry has seen many

58、 developments in the last two to three decades,the data show varying degrees of financial exclusion across regions and countries.Indeed,close to one-third of adults worldwide remain unbanked.6 Moreover,womens financial exclusion(representing the gender gap)has remained stubbornly persistent at aroun

59、d nine percentage points across most parts of Sub-Saharan Africa and varies between five to seven percentage points in South Asia.7,8 Accelerating financial inclusion has been top of mind and a strategic imperative for most countries worldwide as well as financial regulators in developing and emergi

60、ng country representatives of the AFI network.The networks sustained prioritization of financial inclusion can also be attributed to the collective acknowledgement that it serves as an enabler in achieving eight of the seventeen United Nations Sustainable Development Goals(UN SDGs)by 2030.FIGURE 3:P

61、ERCENTAGE OF GLOBAL POPULATION AGED 15+WITH A BANK ACCOUNT,%Male Female70%60%50%40%30%20%10%0%Source:World Bank Findex 201790%80%Arab worldEast Asia&PacificEurope&Central AsiaLatin America&CaribbeanMiddle East&North AfricaSouth AsiaSub-Saharan AfricaWorldAccording to the World Bank3,“being able to h

62、ave access to a transaction account is a first step toward broader financial inclusion since a transaction account allows people to store money,and send and receive payments.A transaction account serves as a gateway to other financial services”.Evidence from AFIs previous research4 show that there a

63、re three key dimensions to a holistic definition of financial inclusion access representing availability and meaningful access to use the services offered by formal and informal financial institutions;usage,i.e.depth and extent of financial services used;and quality,i.e.how financial services fulfil

64、l the needs of the consumers in terms of affordability,fairness,choice,consumer protection,etc.5 For more information read the AFI core set policy model.View here3 World Bank.Financial inclusion.Findex data,2017.Available at:https:/www.worldbank.org/en/topic/financialinclusion/overview.4 AFI.2019.Th

65、e AFI core set policy model.Available at:https:/www.afi-global.org/publications/the-afi-core-set-policy-model/.5 Ibid.6 World Bank.Financial inclusion.Findex data,2017.Available at:https:/www.worldbank.org/en/topic/financialinclusion/overview.7 Ibid.8 CGAP.2018.Measuring womens financial inclusion:T

66、he 2017 Findex story.Available at:https:/www.cgap.org/blog/measuring-womens-financial-inclusion-2017-findex-story.4826767184795952573875643748726510REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONFIGURE 4:ALIGNING THE FINANCIAL REGULATORS MANDATE WITH REGTECH AND SUPTECH DEMANDEvidenc

67、e suggests that DFS alone could benefit millions of people,thereby spurring inclusive growth and adding an additional USD 3.7 trillion to the gross domestic product(GDP)in developing economies.9 In this light,and response to the questions presented in the research objectives,we defined how RegTech a

68、nd SupTech innovations can accelerate and sustain financial inclusion,specifically from the financial regulators perspective and mandate as follows,see Figure 4.Hence,within the context and scope of this report,we explore RegTech and SupTech for financial inclusion through the model depicted below,i

69、dentifying focus areas indicating how RegTech and SupTech innovations can be measured across different thematic areas and collectively present a picture of how financial regulators can leverage this for financial inclusion.We recognize there could be more thematic areas where RegTech and SupTech inn

70、ovations can play an important role;however,for the scope of this report,six key themes were selected.They are believed to indicate areas where RegTech and SupTech can contribute,augment,and facilitate effective methods,processes,tools and actions in creating an inclusive,sustainable,and innovation-

71、ready financial ecosystem for AFI member institutions and other regulators globally.This report adopts the above analysis frame to guide the structure of the following sections.In the six key themes identified,the report discusses RegTech and SupTech use cases,elaborates on a few case studies and fi

72、nally discusses the technology choices available for implementation.Across the themes being considered,the research effort is directed to ensure a balance of perspectives and views on how each RegTech and SupTech use case provides opportunities that will enable regulators to improve oversight,survei

73、llance,and analytical capabilities and generate real-time insights such as risk indicators to support forward-looking,judgment-based regulation,enforcement,supervision,and policymaking.9 McKinsey Global Institute.2016.How digital finance could boost growth in emerging economies.Available at:https:/

74、AND PROMOTING AN ENABLING ECOSYSTEM2 ENSURING MONETARY AND FINANCIAL STABILITY3 MAINTAINING SAFETY AND REDUCING SYSTEMIC RISK4 SUPPORTING A PROPORTIONAL AND BALANCED REGULATORY AND SUPERVISORY REGIMETargeting incumbent FSPs,non-banks,FinTechs and emerging entrants.Promoting a sustainable,inclusive,a

75、nd innovative payment and financial sector.Focusing not only on supply and demand-side in the age of digitization and rapid expansion of access,but also on responsible usage of suitable financial services for all segments,including the disproportionately excluded.Delivering clear risk or activity-ba

76、sed regulation,supervision,and oversight of all participating FSPs,non-banks,financial technology solution providers,and actors in its jurisdiction.BROAD MANDATE11REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONFIGURE 5:KEY THEMES REGTECH AND SUPTECH FOR FINANCIAL INCLUSION THEMATIC A

77、PPROACH TO REGTECH AND SUPTECH FOR FINANCIAL INCLUSION 1REGTECH AND SUPTECH INNOVATIONTechnology-enabled tools,methods and processes enhancing exceptional regulation compliance,reporting,comprehensive supervision and oversight outcomes.2 KEY THEMATIC AREAS 1 Consumer protection and market conduct 2

78、Data-driven financial system stability3 Data collection and management 4 Detection and prevention of financial crimes 5 Remote supervision and reporting 6 Financial inclusion for disadvantaged groups and women3 DRIVERS AND ENABLERS1 Technology choices 2 Appropriate use cases 3 Leadership buy-in and

79、support4 Capabilitytalent and resources5 Industry support6 Multi-stakeholder collaboration4 INCLUSIVE FINANCIAL ECOSYSTEMExpanded access,responsible usage and appropriate quality of financial services to all segments,particularly the disproportionately excluded ones.APPLYING TECHNOLOGY-ENABLED INNOV

80、ATION TO EXPAND ACCESS,RESPONSIBLE USAGE AND APPROPRIATE QUALITY OF FINANCIAL SERVICES TO ALL SEGMENTS,particularly women,youth,IDPs,FDPs,MSMEs,older people and disadvantaged segments.12REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSION1.DETECTION AND PREVENTION OF CONSUMER FRAUDFinanci

81、al services today have rapidly transitioned to the digital sphere with consumers more likely to have digital accounts serving as their primary store of value,and profiles basic Know-Your-Customer(KYC)required information,across multiple FSP,be it conventional banks,digital wallets*provider,mobile mo

82、ney(MM)*operators,or integrated TechFin platforms such as Piggyvest,WeChat,Grab,and GoJek.These factors create an environment where consumers can potentially fall prey to fraud such as identity theft and credit or debit card fraud.Regulators can utilize applicable RegTech and SupTech solutions to en

83、hance their ability to capture and identify relevant datasets,analyze,and draw insights to detect potential fraud patterns,trends,and indicators,as well as act on them to implement more effective fraud prevention measures to guide regulated entities,educate consumers and deter potential criminals.Fo

84、r example,the Central Bank of Nigeria(CBN)s Bank Verification Number(BVN)is a RegTech implemented intervention to tackle a large amount of identity theft and fraud using biometric authentication.10 Other biometric technology applications to RegTech and SupTech might include facial and voice recognit

85、ion.Multi-factor authentication(MFA)is also a validated tool or method that can bolster the security of login processes by adding another layer of verification.Starting with the temporary one-time password(OTP)to the more robust two-factor authentication(2FA)for customers.These distinct forms of ide

86、ntity validation can be promoted under a RegTech or SupTech use case where the regulator can validate their adoption or security standards in apps and solutions being deployed and used in their jurisdictions,thereby providing greater security against fraud.Regulated entities such as financial instit

87、utions and DFS providers can also be encouraged to incorporate biometric identification and verification to enable remote onboarding.1.CONSUMER PROTECTION AND MARKET CONDUCTThe rise of digitalized financial services and innovative financial services providers(FSP)brings new opportunities to the fina

88、ncial industry,including innovative ways to approach financial inclusion,especially for vulnerable groups such as women,older and young people.Although this is a positive development,there is also an emerging risk that FSP(be it emerging FinTech*companies or other non-bank financial service or finan

89、cial technology providers)may unintentionally place a greater financial burden and risks on such vulnerable groups in their ambition to provide ground-breaking solutions.As many FinTechs offering DFS target underserved segments of the population,such as those living in rural and remote areas,youth,l

90、ow-income households,and MSMEs,regulators are mindful of the hidden risks that often accompany this technology-enabled DFS in their delivery channels.Therefore,deliberate efforts to enhance the financial regulators abilities,methods,and processes to build and strengthen an inclusive financial ecosys

91、tem that exemplifies public confidence,trust,responsible business conduct,fair treatment,and protection of consumers through adoption and adaptation of technologies for reporting,compliance,supervision,and oversight mechanisms should be actively explored.REGTECH AND SUPTECH USE CASESTo demonstrate t

92、he application and opportunities inherent in RegTech and SupTech in supporting the abilities,methods,and processes to build and strengthen an inclusive and conducive market that exemplifies public confidence,trust,responsible business conduct,fair treatment,reduction or elimination of fraud and effe

93、ctive protection of consumers,the following practical applications can be considered:10 Gurung,Nora and Perlman,Leon,Use of Regtech by Central Banks and its impact on financial inclusion(November 16,2018).Available at:https:/ AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONIN ACTION MEXICO AND P

94、HILIPPINESBOX 1:EXAMPLE OF CONSAR MEXICO APPLYING REGTECH TO CONSUMER PROTECTION AND MARKET CONDUCT NEEDS12 The Mexican National Commission for the Retirement Savings System(CONSAR)shows how SupTech has been employed to enhance consumer protection and market conduct.The main responsibility of CONSAR

95、 is to coordinate,regulate and oversee the Retirement Savings System,which has deployed a platform for digital documents and identities.In 2013,CONSAR launched an initiative to protect the pension system against emerging fraud risks and promote financial inclusion.The traditional pension supervision

96、 model was ill-equipped to handle emerging cybersecurity challenges,and CONSAR responded to the urgent need to address the countrys widening pension savings and coverage gap.By utilizing digital documents and identities,including biometric authentication,CONSAR increased its capacity and capability

97、to monitor compliance and prevent fraud.In particular,the use of these digital identity verification tools helped them detect and clamp down on widespread mis-selling of pension funds and identity theft by agents.CONSAR also introduced a mobile application that streamlined the onboarding process for

98、 opening an individual savings account and enabled users to perform essential pension planning.This served to attract the previously excluded populations(domestic workers,migrants,self-employees)into the retirement system and incentivized voluntary savings.Business woman Mexico city.(Light and Visio

99、n/Shutterstock)Moreover,regulators can also use shared utilities to create comprehensive user profiles based on other participating government agencies and data provided explicitly by the user.Implementing shared utilities eliminates the need for users to fill out forms or verify documents,thus stre

100、amlining the verification process and removing a potentially vulnerable step in the process that criminals could exploit.2.ENSURING DATA PRIVACY COMPLIANCE WITHIN THE JURISDICTION The use of consumer data by FSPs presents the risk of customer data exploitation via monetization schemes such as cross-

101、selling to third parties or misuse along customer privacy infringements.RegTech and SupTech solutions leveraging AI/ML tools can be employed by the regulator to improve privacy compliance and data governance proactively.AI can be used for data classification purposes where data that fall within priv

102、acy regulations can be identified by AI performing continual sweeps through data stores,sentiment analysis of social media campaigns,etc.AI bots can also be used to recognize,route,and attend to privacy data requests more efficiently than a human operator,thus acting as a“privacy concierge”for users

103、 who wish to communicate with regulators or file a report about data privacy issues.AFI has published a Guideline Note on Data Privacy for Digital Financial Services11 which provides non-binding guidance for a comprehensive,risk-based and proportionate policy and regulatory framework for data privac

104、y for digital financial services(DP4DFS).View here11 AFI.2021.Guideline note on data privacy for digital financial services,Guideline Note No.43.Available at:https:/www.afi-global.org/publications/guideline-note-on-data-privacy-for-digital-financial-services/.12 National Commission for the Retiremen

105、t Savings System(CONSAR).Available at:https:/www.gob.mx/consar.14REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONBOX 2:REGTECH IN BANGKO SENTRAL NG PILIPINAS(BSP)S AI CHATBOT PHILIPPINES13,14 In 2018,the Financial Consumer Protection Department(FCPD)of the BSP partnered with RegTech f

106、or Regulators Accelerator(R2A)and Sinitic,a provider of AI customer experience solutions,to develop a chatbot and processing utility solution for customer complaints.The chatbot,named“BOB”for“BSP Online Buddy”,went live in late 2020,thus allowing Filipinos to file complaints through their mobile pho

107、nes via an app or Short Messaging Service(SMS).Using Natural Language Processing(NLP)and AI/ML technology,the chatbot accept complaints in English or a combination of English and Tagalog,and process them by assigning a case number or classifying them.Following which,the chatbot can either respond di

108、rectly to the complaint or escalate it to the consumer protection staff to be handled by a human operator.The BSP has a central database that files complaints coming from the chatbot along with those from other sources such as voice calls,emails,and kiosks.Additionally,a reporting and management int

109、erface allows consumer protection staff to view analytics for the chatbot and manage the configuration of the chatbots internal logic.Before the chatbot,BSP faced challenges with outdated communication channels,an incomplete database of customer complaints,and a lack of analytical tools.Thus,BSP had

110、 little understanding of the customer experience which made enforcing the BSPs consumer protection mandate very complicated.Implementing the chatbot helped democratize consumer protection,amplify the voice of consumers,and detect cases of fraud.Moreover,by delegating mundane and routine tasks to cha

111、tbots,human labor is freed up to handle more complex tasks such as analyzing recurrent types of fraud and conducting on-site inspections.Filipino teenagers using smartphone.(junpinzon/Shutterstock)13 BFA Global.2018.Di Castri Simone,Matt Grasser,and Arend Kulenkampf.Financial authorities in the era

112、of data abundance:RegTech for regulators and SupTech solutions.Available at:https:/ Primary research interviews with BSP led by the consultant team.15 This may be tech or e-commerce companies that are already connected to large number of clients and hence contains large data volumes.Summarized from

113、Arner,D,Barberis,J,Buckley,R,et al.(2017),From FinTech to TechFin:The regulatory challenges of data-driven finance.Available at:https:/bit.ly/2HgS0bq.2.DATA-DRIVEN FINANCIAL SYSTEM STABILITY The business models and playbooks of FinTechs,TechFins15 and other non-banks provide financial services,such

114、as peer-to-peer(P2P)lending,micro-loans,buy-now-pay-later,payment tokens,virtual assets,etc.are introducing new and unknown risks to the financial system at a local and regional level.While there certainly are benefits brought about by such services and providers,the sometimes-opaque nature of their

115、 internal processes,models and playbooks can make it difficult to understand,much less to monitor.Moreover,the complexities of the technology algorithms and applications might have various bias unconsciously built in,hence,disproportionately excluding vulnerable segments such as women,older people,I

116、DPs or FDPs,MSMEs and youth.However,as advances in FinTech propel greater wealth generation and opportunities to advance financial inclusion,regulators are keen to employ technology-enabled innovations inherent in RegTech and SupTech that enable the promotion of an agile,sound,and stable financial s

117、ystem to withstand adverse economic cycles,disruption or shocks via data-driven insights,robust sentiment analysis,risk management and scenario forecasting and predictions.15REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONREGTECH AND SUPTECH USE CASES1.RISK ASSESSMENTS Risk dashboards

118、 are a commonly used tool by regulators to monitor the vital signs of the financial sector and identify early signs of stress.Such dashboards are usually presented as heat maps to highlight potential financial stability issues.However,in many jurisdictions,data scarcity and lags in reporting make su

119、ch dashboards cumbersome to use and too static to serve as effective gauges of financial system health.Furthermore,as new FinTech products and players emerge,the set of conceivable stress scenarios will broaden.Thus,it is inevitable that regulators will need to conduct more frequent early warning st

120、ress tests that are highly complex and data-intensive.Advanced data analytics solutions,notably data stacks,and data visualization tools(such as Tableau),can help overcome limitations on available data analysis by feeding regulators risk dashboards with higher frequency and more granular data sets.T

121、o obtain this granular level of data,regulators need API connections between them and the regulated entities.However,these connections are non-existent in many cases.Additionally,AI/ML tools,such as anomaly detection,can be leveraged to identify outliers in a given data set to enable a more dynamic

122、M&E process.Finally,incorporating AI/ML solutions into risk dashboards can help create richer visualization tools that improve dashboards prescriptive and predictive ability.2.SENTIMENT ANALYSIS To better understand current market sentiment and possibly forecast changes in the financial ecosystem,re

123、gulators have turned to Natural Language Processing(NLP)tools that scrape information from the web,social media channels and other public available web sources for analysis.Social media sites,such as Twitter,present regulators with a word stream which can provide uncovered insights using NLP sentime

124、nt indicators.With NLP,regulators can scan for words that indicate negative or positive sentiment to forecast financial sector metrics such as retail deposit growth rates.The interconnectedness between banks can also be measured based on banks mentioned in the same tweet.NLP can also analyze corpora

125、te“behavior and culture”by analyzing executive committee meeting minutes or company filings with market supervisory authorities.It can also show up previously hidden bias such as discrimination against certain groups or genders.NLP can assess the tonality of such texts and reports by counting negati

126、ve connotation terms.AI/ML algorithms can then be applied to convert tonality into a risk metric that can help regulators identify firms with possible culture and governance issues that indicate a heightened risk of misconduct.IN ACTION NIGERIABOX 3:CENTRAL BANK OF NIGERIA(CBN)S APIS AND DATA STACK

127、The Central Bank of Nigeria(CBN)and the Nigerian Inter-Bank Settlement System(NIBSS)partnered with BFA Global,a consulting firm,to redesign their data infrastructure for more effective supervision and policy formulation.At the core,is a data warehouse that stores transactional data which is then use

128、d to generate dashboards for CBN to visualize and analyze relevant payments data.Application programming interfaces(APIs)are used to populate the data warehouse with real-time transactional data from NIBSS as well as compliance data from CBN.The data from CBN and NIBSS form the supply-side core,and

129、additional layers of demand-side data can be stacked to contextualize the transactional data.The ability to stack demand-side data such as financial inclusion indicators,population statistics,and access point locations on top of the supply-side core facilitates a deeper understanding of the financia

130、l ecosystem and ensures more effective and timely response from supervisors.Importantly,the data stack provides regulators with a real-time view of key risk metrics on a dashboard,serving as a tool for compliance monitoring and early warning system.Accessing data,Nigeria.(Andrey_Popov/Shutterstock)1

131、6REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSION3.DATA COLLECTION AND MANAGEMENTNewer technologies have automated data collection,enabling high-quality data collection,that can be disaggregated by several factors and parameters(such as gender,age,location,etc.),thus significantly imp

132、roving data storage and sharing capabilities across the board.As a result,regulators,particularly in developed countries16,are adopting and adapting appropriate RegTech and SupTech solutions to help identify,collect,standardize,ensure dataset fidelity and quality,safety store,analyze,and draw insigh

133、ts for effective decision making to address challenges with disproportionately excluded segments such as women,older people,FDPs,or any market segment of interest in real-time.However,due to the individual challenges that each jurisdiction might face,the adoption and adaptation of applicable and app

134、ropriate RegTech or SupTech innovations with regards to data collection and management is still not as widespread.17 REGTECH AND SUPTECH USE CASES1.AUTOMATION OF DATA COLLECTION APIs can be integrated into a central banks reporting system to help with the automation of disaggregated data collection

135、from financial institutions.Many central banks in the world,such as in Lithuania,Mexico and the Philippines,have increasingly adopted an automated system for regulatory reporting.18,19 APIs have been leveraged for regulatory reporting purposes due to their help in reducing compliance costs for finan

136、cial institutions,helping to ease the burden placed on compliance officers.Many technologies make use of these APIs to automate data collection,particularly in regulatory reporting.Robotic process automation(RPA)can also be leveraged to automate repetitive manual tasks,which is likely part of the da

137、ta collection process for regulatory reporting.The traditionally labor-intensive process of data collection for regulatory reporting purposes can thus be automated using the power of RPA.20 16 Toronto Center.2017.FinTech,RegTech and SupTech:What they mean for financial supervision.Available at:https

138、:/res.torontocentre.org/guidedocs/FinTech%20RegTech%20and%20SupTech%20-%20What%20They%20Mean%20for%20Financial%20Supervision%20FINAL.pdf.17 CGAP.2018.RegTech and digital finance supervision:A leap into the future.Available at:https:/www.cgap.org/blog/regtech-and-digital-finance-supervision-leap-futu

139、re.18 Finextra.2020.Bank of Lithuania tests API-based RegTech prototype.Available at:https:/ Gurung,Nora and Perlman,Leon,Use of Regtech by Central Banks and its impact on financial inclusion(November 16,2018).Available at:https:/ Finextra.2019.Putting AI to use in regulatory compliance.Available at

140、:https:/ Hong Kong Monetary Authority(HKMA).2021.Regtech adoption practice guide.Issue 1:Cloud-based Regtech solutions.Use case on SaaS regulatory reporting tool.HKMA and KPMG Regtech Adoption Practice Guide.Available at:https:/www.hkma.gov.hk/media/eng/doc/key-information/press-release/2021/2021061

141、7e5a1.pdf.22 Ibid.23 BFA Global.2018.Financial authorities in the era of data abundance.RegTech for regulators and SupTech solutions.Available at:https:/ VALIDATION,CONSOLIDATION,AND VISUALIZATION SupTech,based on AI/ML,can help tackle data validation issues by identifying anomalies in the data sour

142、ce.One of the critical technologies that have sprung up is shared utilities21 for data consolidation.Similarly,dynamic dashboards are being utilized to read data.These dashboards enable interactive reporting tools to automatically pick up and display data in practical and actionable visualizations,h

143、elping users quickly understand the inferences behind the data.22 These dashboards help authorities understand developments in the financial ecosystem,such as the impact of financial inclusion initiatives on the under-and unbanked.In addition,geographic information systems(GIS)enable central banks t

144、o use the captured geospatial mapping data to improve financial inclusion by visualizing and pinpointing under-or unbanked regions.3.STACKING DATASETS FOR STORAGEData storage is a challenge for all financial market participants.A key issue is the siloed way data are often stored.For example,dependin

145、g on which department has requested the data,the data may be put into a database belonging solely to that department,thus rendering the data inaccessible to others.Even a centralized database does not provide the full flexibility of using the stored data until it can store all the data at once,leavi

146、ng supervisors to work with only a subset of the data at a time.Another problem with fragmented databases is that alternative data sources cannot easily be merged for analysis.23 17REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONCloud computing provides a solution to data storage and

147、access limitations.It enables on-demand and remote network access to secure databases via remote and shared servers hosted on the internet.24 Another possible solution to data management issues is utilizing a data lake.This data warehousing architecture allows for substantially greater scalability t

148、han traditional databases.Using data lakes,datasets can be“stacked”and analytically overlaid to uncover new insights.25 For example,the Central Bank of Nigeria(CBN)partnered with the Nigeria Inter-Bank Settlement System Plc(NIBSS)to redesign their payments data infrastructure to create a data stack(

149、see Box 3).This is a classic example of how data lake can solve data storage problems.264.DATA QUALITYData quality is essential in ensuring valuable data analysis.Typically,issues with data quality arise when non-traditional sources of information are used or when the data source is too big.SupTech

150、can improve data quality for central banks by enabling them to identify anomalies in the data source and collect granular data.SupTech based on AI/ML can help with tackling data quality issues through a more agile detection of anomalies,while API-based SupTech can collect more granular data for impr

151、oved data quality.It is important to note that collecting more data in and of itself does not necessarily mean improved data quality.Therefore,simultaneously detecting anomalies while collecting more granular data will be critical.APIs enable supervisors to manage granular data through“push approach

152、es”or“pull approaches”.The“push approach”requires market participants to automatically upload standardized sets of granular data onto a central database using an API.27 In the“pull approach”,raw data is extracted directly from the market participants IT systems by the supervisor.28 By way of illustr

153、ation,the Central Bank of Austrias(OeNB)Austrian Reporting Services(AuRep)reporting platform bridges the gap between the IT systems of supervised entities and the supervisory agency.29 In addition,the data pull approach is demonstrated by the National Bank of Rwandas(BNR)electronic data warehouse sy

154、stem,which extracts data directly from the IT systems of supervised institutions.30 24 Ibid.25 Ibid.26 BFA Global.2020.Adopting SupTech for anti-money laundering:A diagnostic toolkit.Available at:https:/ CGAP.2017.Denise Dias and Stefan Staschen.Data collection by supervisors of digital financial se

155、rvices.Working paper.Available at:https:/www.cgap.org/sites/default/files/Working-Paper-Data-Collection-by-Supervisors-of-DFS-Dec-2017.pdf.28 Ibid.29 Financial Stability Institute.2018.Dirk Broeders and Jermy Prenio.Innovative technology in financial supervision(SupTech)the experience of early users

156、.FSI Insights on policy implementation No.9.Available at:https:/www.bis.org/fsi/publ/insights9.pdf.30 Ibid.31 R2A.Free speech bilingual chatbot and processing utility for customer complaints,Philippines.Available at:https:/www.r2accelerator.org/api-visualization-prototype.IN ACTION NEPAL AND PHILIPP

157、INESBOX 4:BANGKO SENTRAL NG PILIPINAS(BSP)S DATA REPORTING AND VISUALIZATION31 A well-documented case study demonstrating how APIs can automate data collection is the Bangko Sentral ng Pilipinas(BSP)s API-enabled back-office reporting and visualization software.RegTech for Regulators Accelerator(R2A

158、)partnered with BSP to produce this RegTech solution prototype.The original manual reporting system required banks to submit reports via email.However,by upgrading the system with API technology,regulators can plug into FIs IT systems to obtain raw,granular data to verify and analyze.The new system

159、can lower compliance costs for FIs,increase the quality and quantity of data available for regulators,and enable access to almost real-time customizable reports for staff.It has also shown the feasibility of a market-level API-based solution for prudential reporting,encouraging other regulators to u

160、pgrade their reporting systems.Business man Philippines.(pixfly/Shutterstock)18REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONBOX 5:NEPAL RASTRA BANK(NRB)S GEOGRAPHIC INFORMATION SYSTEM(GIS)32,33,34,35 In 2017,the Nepal Rastra Bank(NRB)unveiled their upgraded reporting system,which c

161、onsisted of an e-mapping system based on GIS.The NRBs Banking and Financial Institutions Regulation Department worked with both the United Nations Capital Development Fund(UNCDF)and the Mobile Money for the Poor(MM4P)program to develop this e-mapping platform.The platform shows all existing physical

162、 financial service access points in Nepal,giving the NRB a way to easily collect and analyze data on regions that lack access to financial services.The financial service access points that are mapped by this platform include users of bank accounts,banks,bank branches,and branchless banking agents.Ad

163、ditionally,the platform provides real-time data on financial access and usage in Nepal,allowing the central bank to track how well any financial inclusion initiatives are being implemented.In addition,this platform allows for compliance of reporting by licensed banking and financial institutions to

164、be tracked class-,institution-,or reporting category-wise.The timeliness and accuracy of compliance is maintained automatically,ensuring the quality of the data collected.Besides the platform,the NRB also worked with the MM4P and the UNCDF to develop a smartphone app called“NRB Data Collect”.This ap

165、p allows the NRB to automate data collection from Financial Institutions,who upload their compliance data together with geospatial information of each of their financial service points(branches,ATMs,cash-in/cash-out points,money exchanges,bill payment merchant networks and remittance agent points).C

166、hecking cell phone,Nepal.(gawrav/iStock)32 UNCDF.2017.Building a backbone for the financial sector in Nepal.Available at:https:/mm4p.uncdf.org/article/2483/building-a-backbone-for-the-financial-sector-in-nepal.33 Nepal Rastra Bank.Financial inclusion dashboard.Available at:https:/emap.nrb.org.np/.34

167、 UNCDF.2018.Nepal Financial Inclusion Portal.Available at:https:/www.uncdf.org/article/4158/nepal-financial-inclusion-portal.35 UNCDF.2021.Accelerating financial inclusion in Nepal with RegTech A case study on the Nepal financial inclusion portal.Available at:https:/www.uncdf.org/article/6523/accele

168、rating-financial-inclusion-in-nepal-with-regtech.4.DETECTION AND PREVENTION OF FINANCIAL CRIMESThe traditional rules-based approach to detecting money laundering and terrorism financing(ML/TF)involves compliance staff having to scrutinize transactional data and client profiles to look for anomalies

169、that match specific predefined filtering rules.This process is arduous,time-consuming,and highly prone to human error and bias.The advent of the digital age has made this process more challenging as the large volume,and high frequency of online transactions means that supervisors who rely heavily on

170、 manual processes are all but helpless against todays cybercriminals.Therefore,regulators and supervisors must equip themselves with the necessary and appropriate SupTech solutions to leapfrog deficiencies in ML/TF compliance,counter inefficiencies in fraud controls and governance,overcome costly pa

171、ssive and manual processes,address insufficient resources for monitoring and high dependencies on human judgement.REGTECH AND SUPTECH USE CASES1.COMPLIANCE WITH AML/CFT REQUIREMENTSSupTech tools can be used to increase the regulators capacity to process substantial amounts of unstructured data,for i

172、nstance,with the analysis of systemic integrity risk reports submitted by financial institutions.These reports are self-assessments submitted by banks about their integrity risks and are usually lengthy documents with varied formats.Regulators can utilize a combination of text mining and AI/ML to se

173、arch for information across a large number of reports and extract relevant data.19REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONThe output can then be used to assess whether the financial institution has a sufficient understanding of the risk it is exposed to and whether it has adeq

174、uate internal controls to handle these risks.36 AI/ML can also be applied to assess the risk profile of financial institutions based on the number of unusual transactions that the financial institution has not reported.The machine is first trained with“manually found”and reported unusual transaction

175、s,following which it can scan the entire data set to discover other transactions with similar patterns.With this tool,supervisors can identify riskier financial institutions as evaluated by the number of unreported unusual transactions and subject these entities to more intensive supervision.2.RISK

176、SCORING FOR SUPERVISED ENTITIESAdvanced data analytics tools enable regulators to incorporate a more comprehensive array of risk factors and other variables to assign a rating to a financial institution,depending on its likelihood of non-compliance with AML/CFT requirements.37 For example,these risk

177、 factors could be related to an institutions corporate profile,compliance history,and reporting behavior.Determining these risk factors is based on large data volumes from reporting entities and other sources and can cover areas such as wire transfer reports,large cash transactions,and suspicious tr

178、ansaction reports(STRs).To ensure the models relevance,a challenger version can be annually developed before being compared with the model in production so that any required updates can be applied to keep the model relevant.3.IDENTIFY NETWORK EXPOSURE OF REGULATED ENTITIESNetwork analysis based on t

179、ransactional data can be used to detect related entities sending funds to the same counterparties in risky countries via different financial institutions.The outcome is used to assess financial institutions risk profiles and inform regulators on allocating supervisory resources.Network analysis can

180、also be applied to unstructured data,such as portions of unstructured text in a suspicious activity report(SAR).This can be done using natural language processing(NLP)to extract information from the text,such as 36 Deloitte.2018.Risk powers performance Systematic Integrity Risk Analysis(SIRA)Clear i

181、nsight into your integrity risks.Available at:https:/ Financial Stability Institute.2019.Rodrigo Coelho,Marco De Simoni and Jermy Prenio.Suptech applications for anti-money laundering.FSI Insights on policy implementation No.18.Available at:https:/www.bis.org/fsi/publ/insights18.pdf.details regardin

182、g the parties relationship mentioned in the text.Alternatively,NLP tools can be applied to other data sources such as social media to investigate people or companies reported to be involved in money laundering and potentially uncover the networks they are exposed to.IN ACTION MEXICOBOX 6:MEXICAN COM

183、ISIN NACIONAL BANCARIA Y DE VALORES(CNBV)S APIS,DATA INFRASTRUCTURE AND STORAGE The National Banking and Securities Commission(CNBV)in Mexico,partnered with R2A and tech vendor Gestell to develop a new data infrastructure and data storage platform that can house transactional data submitted by super

184、vised entities through APIs.The new infrastructure strengthens CNBVs AML supervisory capabilities by increasing the volume,frequency,and granularity of AML-related data available for CNBV to retrieve and analyze.Using AI/ML models and advanced data analytics,the platform can render data in risk dash

185、boards and statistical reports for supervisors to review and analyze.Anomalies in transactional data are highlighted,including risk factors that are not visible to the human eye,and this information can guide supervisors to target on-site visits for further inspection.CNBV previously lacked an effic

186、ient means to extract insights from existing data as supervisors often had to go through the highly inefficient and time-consuming process of loading appropriate data from compact discs and paper files to analyze them in an Excel spreadsheet.With this new solution,CNBV greatly reduces inefficiencies

187、,and is able to generate deeper intelligence making AML supervision more risk-based.Furthermore,CNBV will now be in a much better position to provide guidance to supervised entities on how to improve their AML compliance systems,which can potentially reduce compliance costs.20REGULATORY AND SUPERVIS

188、ORY TECHNOLOGIES FOR FINANCIAL INCLUSION5.REMOTE SUPERVISION AND REPORTING The dwindling need for FSP to have or set up physical branches,the ubiquity of the mobile and internet,the rapid digitalization of DFS and more recently,a global emergency like COVID-19 has highlighted the need for authoritie

189、s and financial institutions to respond swiftly to a fast-changing environment by utilizing the appropriate tools and technology.With the reducing need for supervisors and regulatory inspectors to visit physical branches and points of services,creating tools,methods and processes that enhance except

190、ional regulation compliance,comprehensive supervision and oversight outcomes at lower costs,greater efficiency,reduced or eliminated mobility constraints for both regulators and the regulated is a necessity.This urgent need has motivated not only regulators to accelerate the process of adopting RegT

191、ech and SupTech for remote reporting and supervision purposes,but also financial authorities to advance their digital transformation to enable remote supervision.REGTECH AND SUPTECH USE CASES1.OVERCOMING MOBILITY CONSTRAINTS Monitoring and collecting reports from supervised entities located in more

192、rural areas is both time-consuming and costly as it involves regular on-site visits.SupTech solutions allow supervisors to reach smaller financial institutions cost-effectively,increasing the productivity of supervision teams.A few different SupTech solutions enable remote supervision of these entit

193、ies by regulators and remote reporting by these financial institutions.One of the technologies that central banks can utilize is cloud computing to allow access from both sides to a shared online database that allows for on-demand remote supervision and reporting.As long as the supervised entities l

194、ocated in rural areas of the country have access to the internet,remote supervision is possible with cloud computing.2.ENHANCING SURVEILLANCE AND REMOTE SUPERVISION SupTech opens the possibility for remote,real-time monitoring of DFS providers,such as mobile money(MM)operators.As a result,there will

195、 be better supervision of MM transactions to ensure they are compliant with regulations and have adequate consumer protection.In addition,SupTech can enable remote monitoring and supervision on a more granular level.For example,supervising agent networks for MM firms,banks,insurance companies,and ot

196、her financial institutions.The current approach among regulators is to delegate the monitoring of agent networks to financial institutions and then audit their internal monitoring process.This is done due to both the high cost of supervising thousands of small agents and the lack of information abou

197、t them,allowing regulators to plan their supervisory work accordingly.SupTech can enable regulators to access new information from different sources and examine agents remotely.38 For instance,regulators could utilize shared utilities for data sharing to extract the data they need to examine agents

198、remotely from the central utility rather than requiring FIs to report the same data to each regulator individually.It could also be done by leveraging APIs to connect regulators to financial institutions to extract these data remotely.Alternatively,Distributed Ledger Technology(DLT)can leverage a da

199、tabase for identity management to create agent registries and blocklists for remote surveillance.39 This will allow more outstanding surveillance capabilities for the central bank.An example of a country that has utilized DLT for identity management is Estonia,which uses blockchain technology for id

200、entification purposes.40 38 CGAP.2017.RegTech:Are supervisors ready for the data revolution?Available at:https:/www.cgap.org/blog/regtech-are-supervisors-ready-data-revolution.39 MEDICI Global.2017.22 Companies leveraging blockchain for identity management and authentication.Available at:https:/ PwC

201、.2019.Estonia the digital republic secured by blockchain.Available at:https:/ INCLUSION FOR DISADVANTAGED GROUPS AND WOMEN While there has been general progress in financial inclusion worldwide,with more adults having access to a bank account,the gender gap largely remains unaltered over the last de

202、cade.AFI member countries have adopted the Denarau Action Plan that identifies actions members can take to increase the number of women with access to quality and affordable financial services globally.42 View hereAdditionally,the AFIs Digital Financial Services Working Group(DFSWG)conducted a compr

203、ehensive study to analyze the existing literature and develop a DFS policy framework and implementation plan to assist regulators and financial policymakers in their efforts to reduce or eliminate the financial inclusion gender gap across the AFI network.43 A tangible and expected outcome of improve

204、d financial stability,customer engagement,and sound regulatory environment is addressing the barriers to financial inclusion for women,older people,youth,IDPs or FDPs,and other disproportionately excluded segments.Many of the proposed measures and guidelines in some of the knowledge products availab

205、le on the AFI Publication Hub44 can be complimented or accelerated by adopting applicable SupTech solutions by regulators and RegTech solutions by FSP.21REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONIN ACTION RWANDA BOX 7:NATIONAL BANK OF RWANDA(BNR)S ELECTRONIC DATA WAREHOUSE SYSTE

206、M41 In 2017,along with Sunoida Solutions,the National Bank of Rwanda(BNR)developed an electronic data warehouse(EDW)system.The system automates and streamlines the reporting process by enabling BNR to pull data on a daily basis from financial service providers systems,opening up the possibility for

207、real-time monitoring.However,due to Savings and Credit Cooperatives(SACCOs)in Rwanda not having the appropriate IT systems to enable BNR to remotely pull their data,manual reporting via Excel templates is still allowed for those firms.This new approach by the BNR reduces errors and data quality issu

208、es found in manual Excel reporting,whilst also improving the timeliness and reliability of the data collection process.In addition,the switch to an automated remote reporting process gives BNR the ability to remotely conduct their supervision,thus safeguarding against emergencies where in-person rep

209、orting by FSP is not possible.This is especially evident after the COVID-19 pandemic,where many finance processes had to undergo a shift to digital platforms to mitigate face-to-face contact.Using digital tablet,Rwanda.(stellalevi/iStock)41 World Bank Blog.2017.“Leveraging suptech for financial incl

210、usion in Rwanda”,June 8.Available at:https:/blogs.worldbank.org/psd/leveraging-suptech-financial-inclusion-rwanda.42 AFI.2019.Denarau Action Plan:The AFI network commitment to gender and womens financial inclusion.Available at:https:/www.afi-global.org/publications/denarau-action-plan-the-afi-networ

211、k-commitment-to-gender-and-womens-financial-inclusion/.43 AFI.2020.Lessons on enhancing womens financial inclusion using digital financial services(DFS).Available at:https:/www.afi-global.org/publications/lessons-on-enhancing-womens-financial-inclusion-using-digital-financial-services-dfs/.44 Availa

212、ble at:https:/www.afi-global.org/library/.22REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONREGTECH AND SUPTECH USE CASES1.IDENTIFYING&ADDRESSING GAPS IN ACCESS AND USAGE With innovative RegTech and SupTech tools,central banks and regulators can analyze and extract meaning from data o

213、n more complex levels,improving their ability to develop and evaluate financial inclusion policies targeted at disadvantaged groups and women.For instance,RegTech and SupTech tools allow for the collection of age and sex-disaggregated data that enable central banks to paint a clearer picture of the

214、level of access to financial services across genders.This data can then be used to formulate policies to address the gender gap and develop more targeted financial services or improve the roll-out of financial products to reach across genders more evenly.AI-driven chatbots offer another potential us

215、e case for central banks to improve access to financial services for disadvantaged groups and women,and enhance customer engagement.For instance,chatbots can be used for educational purposes,such as providing short courses on personal finance and tutorials on accessing and using banking services.Cha

216、tbots can also automate and improve customer service functions by giving customers a more convenient way to file complaints or check the balance in their accounts.Policy framework for womens financial inclusion using digital financial servicesPolicy Model for MSME FinanceAdvancing the Financial Incl

217、usion of Forcibly Displaced Persons:Case Studies on Rwanda,Mauritania and AfghanistanYouth Financial Inclusion Policy FrameworkThis is especially relevant to disadvantaged groups,such as refugees,that face mobility constraints and thus cannot easily access a physical bank outlet.2.IMPROVING THE ONBO

218、ARDING PROCESSOne significant barrier to increasing access to financial services for women is the KYC and Customer Due Diligence(CDD)*process,which often requires documents and identification,which financially excluded women do not have and cannot quickly obtain.FSP are often constrained by KYC and

219、CDD processes that are not commensurate with the customers level of financial crime risk.Central banks and market participants can use RegTech tools to identify and filter for low-risk customers,who can then be granted a concession to go through a simplified CDD process.Such tools can utilize AI/ML

220、models to gather and analyze a broader range of variables that can be used to classify the risk level of potential customers.Based on this classification,customers can then be assigned to a tiered KYC level and provided with a corresponding bank account whose features accord to AML/CFT guidelines.23

221、REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSION3.ALGORITHM AUDITS TO ENSURE EQUITY AND FAIRNESS IN DISTRIBUTION OF DFSAI-driven risk-assessment technology is increasingly becoming widespread in the financial sector as new technology has given firms the ability to run highly complex r

222、isk models using a growing array of variables,thus dramatically enhancing the speed and accuracy of credit scoring and insurance underwriting.However,this development also raises ethical issues as unnoticed errors or biases in algorithms might intentionally or unintentionally discriminate against ce

223、rtain groups.For example,technology may be gender-neutral when it comes to addressing the gender gap in financial inclusion.Still,the way technology is developed and used is often not,and the biases that the people who create it have,are often transposed into the systems they develop.Men are the pre

224、dominant gender in both the technology and finance industry as such.As a result,factors and variables that affect women may be left out of algorithms because their significance and impact are not understood and recognized.Ironically,more and better-quality data may not be a necessity to move towards

225、 more gender-inclusive finance.The relevant data has already been collected very often but has not been analyzed from a gender perspective,using filters and variables that are gender sensitive.Therefore,regulators and supervisors need to consider auditing the existing methods that algorithms use to

226、identify potential pitfalls where the gender perspective may have been overlooked.To achieve this,supervisors can create“robots”that appear as potential financial service clients and are assigned profiles with varying attributes.Then,by analyzing how the algorithms treat these robots,biases in autom

227、ated processes can be detected and,more importantly,addressed and overcome.Additionally,a growing toolkit of statistical and machine learning techniques for auditing algorithms is emerging and it would be prudent for regulators to pay attention to this area as it continues to develop.IN ACTION-GHANA

228、BOX 8:BANK OF GHANAS AI/ML AND BIG DATA In 2019,the Bank of Ghana implemented a fully integrated financial surveillance system from Vizor Software,a provider of SupTech solutions for financial regulators.The system,called ORASS(Online Regulatory and Analytical Surveillance Software),provides a centr

229、alized portal to collect prudential data from banks and deposit-taking institutions as well as manage the licensing and authorization of supervised entities.Compared to the previous system that the Bank of Ghana used,ORASS is able to provide a much more comprehensive data set that captures transacti

230、onal data from other financial services beyond just payments.With ORASS,the Bank of Ghana was able to obtain loan application data such as the split between men and women who were granted or denied loans.Data analysis showed that compared to men,women accounted for a smaller share of total loan appl

231、icants and generally asked for smaller loan amounts.However the percentage of women denied loans was significantly higher.Furthermore,ORASS captured data on inbound remittances and identified the types of accounts that the transfer was made to(e.g.e-wallet or bank account)as well as the gender of th

232、e receiving account owner.The trend uncovered in the data is that very few women use e-wallets or other digital financial services for remittances.These two instances demonstrate the power of using comprehensive,granular,and sex-disaggregated data to identify problematic areas that are causing gende

233、r exclusion in finance.Observing data trends also helped the Bank of Ghana understand the root causes of the problem,which enables them to improve policy formulation and more effectively address the gender gap in access to financial services.Online technology,Ghana.(Gerhard Pettersson/iStock)24REGUL

234、ATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTECHNOLOGY CHOICES To help regulators leverage technology in the above-discussed thematic areas,there are a plethora of options that financial authorities and regulators could choose from,based on specific context and purpose within their ins

235、titution,industry,jurisdiction or use cases.Some of the technologies powering RegTech and SupTech innovations found across both developing and developed countries are highlighted below:25REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONS/NTECHNOLOGY OPTIONSDESCRIPTIONCORRESPONDING 1AI/

236、ML Tracks,monitors,uses predictive analytics to inform regulators.Assists in the automation of sex-and age-disaggregated data collection and in improving data quality.Incorporates a broader range of analysis variables to catch more complex money laundering techniques.Enables easy remote supervision

237、and reporting.Helps extract meaning from diverse data sets to assess the extent of exclusion from the financial ecosystem.Consumer protection and market conduct Data-driven financial system stability Data collection and management(e.g.sex-and age-disaggregated)Detection and prevention of financial c

238、rimes Remote supervision and reporting Financial inclusion for disadvantaged groups and women 2BIOMETRICS Provide robust methods for identity verification such as improving KYC/CDD processes.Consumer protection and market conduct Detection and prevention of financial crimes 3APIs Help regulators gat

239、her data from financial institutions and other regulated entities.Allow regulators to obtain raw data from FIs IT systems and enhance data quality for supervisory and policy development purposes.Allow for supervised entities to digitally submit information for AML compliance,enabling supervisors to

240、validate new SARs efficiently.Consumer protection and market conduct Data collection and management(e.g.sex-and age-disaggregated)Detection and prevention of financial crimes Remote supervision and reporting 4SHARED UTILITIES Reduce CDD data duplication.Help in the input of reporting data into a cen

241、tral utility and can be used for remote analysis by regulators for supervision purposes.Provide an online profile for identification and verification,resulting in reduced burden for customer onboarding,allowing vulnerable groups and women more access to financial services.Consumer protection and mar

242、ket conduct Remote supervision and reporting Financial inclusion for disadvantaged groups and women5BIG DATA ANALYTICS Help in extracting and analyzing vast volumes of data.Aid the use of dashboards for visualization to understand developments in the financial landscape.Used to analyze transaction t

243、rends and identify any anomalies.Used to generate forecasts of trends on income and savings and inform central banks,helping them to address the region-specific challenges.Data-driven financial system stability Data collection and management(e.g.sex-and age-disaggregated)Detection and prevention of

244、financial crimes Financial inclusion for disadvantaged groups and women 26REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSION45 Financial Stability Institute.2018.Dirk Broeders and Jermy Prenio.Innovative technology in financial supervision(SupTech)the experience of early users.FSI Insig

245、hts on policy implementation No.9.Available at:https:/www.bis.org/fsi/publ/insights9.pdf.46 Toronto Centre.2017.FinTech,RegTech and SupTech:What they mean for financial supervision.Available at:https:/res.torontocentre.org/guidedocs/FinTech%20RegTech%20and%20SupTech%20-%20What%20They%20Mean%20for%20

246、Financial%20Supervision%20FINAL.pdf.47 Ernst&Young.2019.Regulatory technology(RegTech)Navigating the right technology to manage the evolving regulatory environment.Available at:https:/ Gurung,Nora and Perlman,Leon,Use of Regtech by Central Banks and its impact on financial inclusion(November 16,2018

247、).Available at:https:/ OPTIONSDESCRIPTIONCORRESPONDING 6NLP Uncovers insights from online sources such as social media and research articles,and provide feedback on market sentiment for forecasting.Used to extract information from unstructured text to help identify people or companies engaging in mo

248、ney laundering activities.Data-driven financial system stability Detection and prevention of financial crimes7CLOUD COMPUTING Enables flexible storage and the ability to process large data volumes.Lowers costs and increases storage capacity for supervisory agencies.45 Enables on-demand and remote ne

249、twork access to the data,facilitating remote supervision and reporting.46 Data collection and management(e.g.sex-and age-disaggregated)Remote supervision and reporting 8DATA LAKE Ensures capability to consolidate data into a single source from multiple source systems.47 Data collection and managemen

250、t9DISTRIBUTED LEDGER TECHNOLOGY(DLT)A distributed database that enables remote real-time client data sharing through verified data that has been saved and encrypted.48 Remote supervision and reporting27REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONIN ACTION EUROPEAN FORUM FOR INNOVA

251、TION FACILITATORS SANDBOXBOX 9:EUROPEAN FORUM FOR INNOVATION FACILITATORS(EFIF)SANDBOX50 The European Supervisory Authorities(ESAs)established the European Forum for Innovation Facilitators(EFIF)in April 2019.The EFIF provides a platform for European supervisors to meet regularly to share experience

252、s from engagement with firms through innovation facilitators(regulatory sandboxes and innovation hubs),to share technological expertise,and to reach common views on the regulatory treatment of innovative products,services,and business models,overall boosting bilateral and multilateral coordination.T

253、he EFIF is a relatively new organization but will provide the basis for more effective and engaged cross-border collaboration within the European Union.More specifically,the EFIF is designed to answer:1)How can a particular technology or set of technologies be used?2)Where do supervisors see current

254、 or potential issues in the use of a technology?3)Are there obstacles to the adoption and use of the technology?One of the use cases that may prove to be an important value-add of the EFIF,is cross-border collaboration especially when it comes to cross-border usage and functionality.The EFIF provide

255、s a centralized point of coordination where individual country solutions can be tested with either the same countrys data or potentially regional data.This allows the member country to effectively test its own solutions and allows other countries to benefit from the same testing.Technology testing.(

256、Pressmaster/Shutterstock)ROLE OF INNOVATIVE REGULATORY APPROACHES As technology options,implications and application might not be a direct capability for policymakers and regulators,its influence and impact on current and future market scenarios and outcomes cannot be denied.The paradigm shift that

257、is increasingly growing with more technology adoption by the market,industry and regulator presents challenges that might extend to financial stability,consumer protection and the risk of financial exclusion.For financial regulators to take a balanced approach to innovation,encouraging the adoption

258、and use while ensuring none of the tenets of its mandate is ignored,several innovative regulatory approaches can be explored.AFIs recent publication Innovative Regulatory Approaches Toolkit49 highlights some of these approaches including,but not limited to,regulatory sandboxes.View hereThe regulator

259、y sandbox allows regulators to test,observe,and analyze the impact of products or services created,delivered or improved using digitization to see if these are safe for the market.It also enables regulators to consider any regulatory actions or frameworks that need to be implemented to control risk.

260、These sandboxes become especially useful in scenarios where technologies or platforms have the potential to introduce significant risk into the ecosystem.One example of the usage of sandboxes in the RegTech space is given by the European Union.49 AFI.2021.Innovative regulatory approaches toolkit.Ava

261、ilable at:https:/www.afi-global.org/publications/innovative-regulatory-approaches-toolkit/.50 Joint Committee of the European Supervisory Authorities(ESAs).European Forum for Innovation Facilitators(EFIF).Available at:https:/esas-joint-committee.europa.eu/Pages/Activities/European-Forum-for-Innovati

262、on-Facilitators-(EFIF).aspx.28REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONPOLICY FRAMEWORK ON REGTECH FOR FINANCIAL INCLUSION29REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONand supervisory scenarios,maintaining the right balance between automation,technology and h

263、uman judgement is key regardless how advanced AI is coming along,certain areas are better handled by humans until all risks elements identified are not exacerbated by technology and can appropriately be mitigated in a Regtech or SupTech regime.The policy framework follows a process and lifecycle app

264、roach for RegTech adoption from analyzing the local contexts to engaging stakeholders to implementation.Each stage builds upon the outcomes of the previous one,and the framework incorporates concepts of design thinking and agile methodology for project management.However,it must be noted that while

265、the roadmap and solutions put forward in this paper are broadly relevant for emerging economies,these are not homogenous.As we expect the fast-developing technological landscape to continue,especially around RegTech and SupTech innovation and adoption,it is essential to have a framework developed ba

266、sed on insights drawn across several countries within the AFI network and beyond,to serve as guidance for regulators seeking to adopt,adapt,experiment,or improve their RegTech and SupTech policies,interventions,projects,or frameworks.The framework is intended to present policy guidance,practical ste

267、ps and approaches that will help AFI members design,develop,adopt,and adapt RegTech and SupTech initiatives for different and relevant thematic areas,as well as,promote financial inclusion.It is worth noting that although technological enabled advances in RegTech and SupTech innovation might be grow

268、ing and applicable to several regulatory use cases FIGURE 6:POLICY FRAMEWORK FOR REGTECH FOR FINANCIAL INCLUSION THE FIVE-STEP POLICY FRAMEWORK FOR REGTECH FOR FINANCIAL INCLUSION IS AS DEPICTED BELOW:1ANALYSIS OF LOCAL CONTEXT 2ASSESS CAPABILITIES3ENGAGE STAKEHOLDERS4DESIGN5IMPLEMENTPlan and execut

269、e a comprehensive diagnosis of the market,industry and regulatory landscape to discover needs,gaps and challenges.Perform a candid appraisal of internal and external(industry)capabilities for talent,resources,process and systems.Adopt a bottom-up approach to engagement,cooperation and collaboration

270、with stakeholders to ensure buy-in.Design for purpose,choosing appropriate technologies and aligning to industry and jurisdiction needs,and financial inclusion targets.Employ an appropriate(phase,experimental,etc.)implementation approach fit for your context,use case and NFIS targets.REGTECH AND SUP

271、TECH GOALS30REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONThe comprehensive diagnosis is the foundation for achieving an actionable,inclusive,and appropriate RegTech and SupTech framework or intervention that supports and contributes to the fulfilment of national financial inclusion

272、 objectives.OUTCOME CHECKLIST Upon completing the comprehensive diagnosis and analysis of the local context,identifying,and achieving outcomes with the following elements are recommended.STEP 1:ANALYZE THE LOCAL CONTEXTBuilding a policy framework for the adoption of RegTech that supports financial i

273、nclusion is complex and requires a number of steps and processes.The first one is to conduct a thorough diagnosis of the local context demand,supply,and regulatory/policy side.CHECKLIST CRITERIAAPPLICABILITY SUGGESTED INSIGHTS/CONSIDERATIONS1DIGITAL INFRASTRUCTURE Jurisdiction(Regulator)1 Determinat

274、ion of the availability,rate of access and affordability of stable internet on a national level.2 Presence and impact of strategically and systemically important financial system or payments infrastructure.3 Level of interoperability and digital integration within the jurisdiction and industry.4 Pre

275、sence and adequacy of policies,frameworks and guidelines on data protection and privacy,cybersecurity,or cyber hygiene,outsourcing of digital services,open data/API/banking/finance,FinTech regulation or supervision framework,etc.5 Access and growth in cloud computing,storage,and data storage facilit

276、ies.6 Existing standardization level within industry covering payment systems,data sharing,reporting and regulatory compliance.7 Through a proportionality and inclusion lens,classify the types,number and distribution of regulated entities,including traditional commercial banks,micro-finance institut

277、ions,electronic-money issuers,digital wallet providers,digital banks,TechFins,FinTechs,financial and payment technology service providers,etc.8 Feasibility and dependency assessment of potential use cases.Industry(FSP)1 Clear understanding of the regulatory reporting and compliance requirements.2 Co

278、mpliance with all existing and future policies,regulation and mandates.3 Level of digital transformation within legacy systems and capacity to integrate with newer systems.4 APIs,data sharing and exchange standardization levels within bilateral and multi-lateral relationships.5 Current and potential

279、 gaps in process,methods and ability to adequately capture disaggregated and granular data on financial inclusion indicators.6 State of adoption of cloud storage and computing.7 Capability level with regards to skills,talents,resources needed to adopt and adapt technology enabled innovation.Market(C

280、ustomer)1 Affordable and accessible internet and digital devices.2 Appraisal of digital and financial literacy with regards to DFS.3 Adequate policies to protect consumers and market with regards to cyber hygiene,data protection and privacy,use of data,outsourcing and third parties,etc.TABLE 4:INDIC

281、ATIVE OUTCOME CHECKLIST FOR A LANDSCAPE DIAGNOSIS FOR REGTECH AND SUPTECH 31REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTHE FOLLOWING FIVE MUST-HAVE CONSIDERATIONS MAY BE ADOPTED TO CONDUCT A THOROUGH LANDSCAPE DIAGNOSTICS AND ANALYSIS.1IDENTIFY AND DEFINE THE PROBLEMS AND GAPS Us

282、e necessary quantitative and qualitative tools and methods,including surveys,interviews,observations,focus group discussion,stakeholder engagement and feedback to identify existing and potential problem(s)and gaps with industry or regulators ability,methods,and processes towards the adoption or impl

283、ementation of a RegTech or SupTech innovation for financial inclusion.2 PRIORITIZE THE PAIN-POINTS AND OPPORTUNITIES While there might be several gaps,the next step will be to consider the impact,likely use cases,cost,capability and ascribe weights to each evaluated gap that need improvement and pri

284、oritize pain points that need to be addressed.Apply the appropriate inclusion lens(e.g.gender)early and also consider a vital factor in estimating impact and priority weights.3 RECOGNIZE APPROPRIATE AND APPLICABLE USE CASES While current use cases of RegTech and SupTech implementation might defer ac

285、ross countries and even within the same jurisdiction for both regulators and industry players,recognize the best applicable use cases and scenarios that deliver maximum value of broad buy-in,lower cost,simplified implementation,greater efficiency to process,methods and applications,alignment with in

286、ternal and external capabilities and ultimately contribute or accelerate maximum impact for financial inclusion.4 ACHIEVE CONSENSUS ON OVERARCHING VISION AND OBJECTIVES It is important to achieve consensus on the compelling direction,vision and goals for the RegTech or SupTech intervention that is a

287、greeable to all parties and stakeholders including leadership,other regulators or supervisors,industry,regulated entities and internal stakeholders.5 COMMIT TO A DATA-DRIVEN AND PRACTICAL APPROACH Based on the outcome of the landscape assessment,adopt a robust data-driven mindset towards decisions a

288、nd actions going forward.Insight drawn from the diagnostics must inform next steps,e.g.should a phased adoption and implementation be considered?Will an innovative regulatory approach such as a sandbox be expedient?This approach will also simplify monitoring,project management and documentation.32RE

289、GULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTABLE 4:continuedCHECKLIST CRITERIAAPPLICABILITY SUGGESTED INSIGHTS/CONSIDERATIONS2USER PREPAREDNESSJurisdiction(Regulator)1 Consider requirements and need to upskill,train and build capacity internally for data collection,visualization,an

290、alysis,management.2 Consider gender-sensitive training and capacity building on recognizing bias,concerns and spurious relationships within dataset.3 Consider frequently scheduled appreciation workshops on emerging technologies,digital tools and capability to understand and appreciate RegTech tools

291、for compliance reporting and SupTech for supervisory oversight including AI/ML,NLPs,chatbots,etc.4 Consider experimenting a RegTech module to create an industry-wide alignment and foster talent development in the space.Industry(FSP)1 Consider gender-sensitive training and capacity building on recogn

292、izing bias and spurious relationships within dataset captured by RegTech tools.2 Consider frequently scheduled appreciation workshops on emerging technologies,digital tools,and capability to understand and appreciate RegTech tools for compliance reporting and SupTech for supervisory oversight.3 Eval

293、uate impact of emerging technology implementation on consumer protection,data privacy and cyber hygiene and contribution to adequate consumer digital and financial literacy with tools such as chatbots,digital IDs,e-KYC,and remote onboarding will be critical.Other variables to consider include litera

294、cy.3REGULATORY LEADERSHIP AND COMMUNICATIONJurisdiction(Regulator)1 Aim to influence the industry via regulatory leadership with RegTech and SupTech initiatives to ensure rapid uptake by the industry.2 Leverage open dialogues and discussion to build clear understanding and garner support.3 Lead in t

295、he identification of apparent problems,gaps and inefficiencies in regulatory reporting,compliance or supervision processes,methods and tools and work with the industry to prioritize areas fit for immediate resolutions.4 Lead in the recruiting of specialized teams to take up the implementation of Reg

296、Tech and SupTech interventions and commit to upskilling of existing staff.5 Devote funds,investment and resources to industry level capacity building,technical appreciation,and grants to support,incubate and accelerate adoption and use of relevant RegTech solutions for identified and approved use ca

297、ses.6 Regulators could also introduce a RegTech skills framework to identify the skills required for different roles to accelerate the adoption of RegTech.Such a framework could then be disseminated to FIs to develop training internally or share it with external service providers.4COLLABORATIONJuris

298、diction(Regulator)and industry(FSP)1 Lead and provide an appropriate channel for market participants and industry to discuss and collaborate.2 Successful implementations will require buy-in from everyone early in the development process.3 Establish appropriate channels for market participants to voi

299、ce their concerns and share suggestions.4 Review RegTech and SupTech initiatives periodically following legitimate concerns and feedback received on cybersecurity,data privacy,or third-party dependencies,using a bottom-up approach.33REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONFurt

300、hermore,the following process is suggested to assess capabilities even from a holistic perspective:1)Undertake a cost-benefit analysis for regulators to understand the capital investment,operational costs,potential labor and resources,and efficiency gains for either or both Regtech and SupTech initi

301、atives.2)Identify resources and capacity constraints for internal development(at regulator and industry level).3)Assess the need for an external vendor and align on an appropriate vendor selection model,if required.4)Establish vetting criteria and a committee assigned to evaluate,nominate and contra

302、ct vendors.The Capabilities Assessment framework consists of two components,i.e.“Internal capabilities”and“External stakeholders”.Central banks and regulators can use this framework to analyze their internal and external environment to identify resources and constraints for implementing RegTech and

303、SupTech solutions.STEP 2:ASSESS CAPABILITIESAssessing existing capabilities to undertake and successfully implement a RegTech or SupTech intervention is an important step as this not only enables regulators to map out existing resources and gaps,but also helps them to understand and estimate future

304、capability requirements and work towards achieving those.Therefore,starting with the RegTech or SupTech journey,identifying and assessing capabilities needs under each stage of the lifecycle is imperative.STAGES OF TYPICAL SUPTECH OR REGTECH JOURNEYAs part of the capabilities assessment process,regu

305、lators and ecosystem players need to also measure where they are in their SupTech journey and where they need to go next.FIGURE 7:TYPICAL STAGES OF REGTECH AND SUPTECH MANUAL PROCESSES BASIC AUTOMATIONBIG DATA ARCHITECTUREAI-DRIVEN PROCESSESTABLE 6:EXAMPLES OF INTERNAL CAPABILITIES AND EXTERNAL STAK

306、EHOLDERSINTERNAL CAPABILITIESEXTERNAL STAKEHOLDERSCapital costsTechnology solution providers(TSPs)Operational costsDonorsSet-up timeMarket participantsManagement timeSource:Kapronasia34REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONTABLE 5:INSIGHTS INTO STAGES OF REGTECH AND SUPTECH

307、STAGEINSIGHTS1MANUAL PROCESSESThe first stage of SupTech or RegTech is the beginning point for most supervisors and industry,where data management workflows are heavily manual,and the type of analytics done is primarily descriptive.At this stage of RegTech or SupTech development,data collection is t

308、ypically received/sent via email or hardcopy documents and is often restricted by limited file sizes and data security issues.51 Data management is relatively simple,with data visualization accomplished through static reports and data validation conducted manually through“spot checks”or automated ch

309、ecks via macros on spreadsheets.52 The transfer of data collected to data storage for more profound analysis is also done manually.2BASIC AUTOMATIONWhen supervisors and industry progress to the second stage of RegTech or SupTech(as applicable),data collection has evolved to allow for basic automatio

310、n through web-based portals or bulk uploads.These sharing and collection tools are typically integrated with automated validation checks built into the upload protocol.53 Data storage in this stage of RegTech or SupTech is made more centralized and less fragmented through utilizing data warehouses.3

311、BIG DATA ARCHITECTURE In adopting significant data architecture for their IT systems,supervisors and the industry are able to incorporate RegTech or SupTech that involves using technology stacks that support data of higher granularity,diversity,and frequency.54 The use of APIs and RPA in RegTech or

312、SupTech at this stage allows for data collection/sharing and consolidation to become fully automated.Additionally,the use of APIs gives regulators/industry the ability to integrate their SupTech(or RegTech)systems into market participants(or regulators)IT systems,enabling the collection(or sharing)o

313、f real-time data.Data storage and computation are enhanced in significant data architecture using cloud storage and data lakes.This allows for advanced statistical modeling that enables supervisors to conduct predictive analytics.554AI-DRIVEN PROCESSESGenerally,AI-enabled SupTech necessitates an und

314、erlying significant data architecture since most AI models require substantial data volumes and considerable computing power for valuable results.56 Therefore,this would be the last stage of SupTech development for supervisors.AI/ML-based SupTech tools can improve data validation via identifying ano

315、malies in the data source.Additionally,these SupTech solutions can enable further real-time monitoring by supervisors via chatbots that carry out supervisory tasks previously performed by humans,such as responding to and resolving customer complaints.57 Moreover,the use of AI and machine learning in

316、 SupTech solutions to drive data analytics enables prescriptive analysis to be carried out by supervisors,which could be used to evaluate,formulate,or tweak policies.Specific policies that can be impacted through prescriptive analytics include those targeting financial inclusion.In addition,the emer

317、gence of blockchain and distributed ledger technology can also be applied in SupTech to further the benefits supervisors can gain from SupTech solutions and tools.51 Financial Stability Institute.2019.Simone di Castri,Stefan Hohl,Arend Kulenkampff and Jermy Prenio.The SupTech generations.FSI Insight

318、s on policy implementation No.19.Available at:https:/www.bis.org/fsi/publ/insights19.pdf.52 Ibid.53 Ibid.54 Ibid.55 Ibid.56 Ibid.57 RegTech for Regulators Accelerator(R2A).Case study:Chatbot prototype.Available at:https:/www.r2accelerator.org/chatbot-prototype-1.35REGULATORY AND SUPERVISORY TECHNOLO

319、GIES FOR FINANCIAL INCLUSIONIt should be noted that there should be a greater degree of alignment in terms of focus between internal and external considerations,without neglecting one for another.However,external parties can play an essential role in enabling the successful development and implement

320、ation of RegTech and SupTech solutions.External technology solutions vendors,with their vast knowledge of IT and SupTech systems,can be instrumental in helping a regulator deal with rapid changes in technology and overcoming limited in-house technical skills and resources.Strategic partners often pr

321、ovide financial resources and technical assistance to promote awareness and implementation efforts related to RegTech,SupTech and financial inclusion,especially in developing countries with few well-developed success stories.Moreover,through their constant contact with regulators,donors can be influ

322、ential in obtaining buy-in and support from regulators and market participants.STEP 3:ENGAGE STAKEHOLDERSImplementing RegTech or SupTech solutions is most effective when financial policymakers and regulators can involve other regulators,and even market participants,in the early stages of identifying

323、 areas of improvement,all the way through the development and launch of the end product.Collaboration with other regulators and departments within the central bank can be achieved using a consultative approach to managing the various steps in the framework above.For instance,a steering committee can

324、 be set up to include representatives from all supervisory departments so that the development of the solution will be more inclusive of different regulatory perspectives and concerns.Preferably,potential managers and users of the system can be brought on early in the process to be involved with the

325、 design of the solution.To improve collaboration with supervised entities,it is essential to have open dialogue and discussion channels with the central bank and regulators.The formation of an advisory group with representatives from supervised entities can be an effective way for regulators to rece

326、ive feedback and recommendations,and communicate policy goals and the planned action steps to reach them.It will also be important to conduct stakeholder interviews with organizations working on Gender Inclusive Finance(GIF),inclusion of disproportionately excluded segments including youth,older peo

327、ple,MSMEs,FDPs,etc.to understand opportunities to address the peculiar gaps and financial exclusion instances for these segments.36REGULATORY AND SUPERVISORY TECHNOLOGIES FOR FINANCIAL INCLUSIONb)Set up a whole implementation team with a balance of tech professionals and regulatory officers.c)Have f

328、requent check-ins with stakeholders and make adjustments as necessary.d)Communicate intended solution goals and impact on stakeholders and users.e)Determine and balance the need for in-house versus third-party providers,including developing new solutions internally or by contracting an external Tech

329、nology Service Provider(TSP).f)Document key lessons and apply“rapid learnings”from each iteration to progressively refine the project;establish a change management strategy to optimize the benefits of the solution for end-users.g)Decide how to take the RegTech or SupTech solution to market.Successfu

330、l deployment requires planning,early and frequent communication,training,capability building,change management,and adequate deployment support.Therefore,tracking,documenting,and publicizing benefits where appropriate(e.g.cost savings,person-hours reduced,reduced fraud)to highlight the solutions impa

331、ct will be necessary to generate continued interest and support from other government agencies and market players.To successfully implement these solutions,continuous monitoring,evaluation,and learning(ME&L)will be essential.ME&L should be compulsorily included as part of the implementation process

332、to ensure the desired outcome is achieved and continuously learn what works and what does not,and improve the processes accordingly.This will ensure that the framework adopted is both well-rounded and agile.STEP 4:DESIGN Design will be an essential part of the overall process,and there are a few imp

333、ortant considerations to keep in mind,primarily to ensure that technical specifications are well-specified and feasible to implement:1)Engage in a design sprint to decide on key design features.2)Craft a mock-up with limited functionality to determine if the concept will work as envisioned.3)Use dummy data and basic barebones technology to demonstrate the concept feasibility.4)Draft intelligible f