Reg­u­la­tors must evolve or risk hin­der­ing fin­tech growth

NZ Business - - IN­BOX -

Fi­nan­cial mar­ket reg­u­la­tors need to in­no­vate or run the risk of slow­ing growth in the global NZ$24 bil­lion tech­nol­ogy-based fi­nan­cial ser­vices in­dus­try, ac­cord­ing to a new re­port by Char­tered Ac­coun­tants Aus­tralia and New Zealand.

The Reg­u­la­tor of 2030: Reg­u­lat­ing our dig­i­tal fu­ture ac­knowl­edges grow­ing chal­lenges faced by all reg­u­la­tors as new tech­nolo­gies emerge at a pace many are un­able to match.

EY re­search com­mis­sioned by the United King­dom’s HM Trea­sury in­di­cates “that ju­ris­dic­tions with sup­port­ive and flex­i­ble reg­u­la­tory regimes have rel­a­tively suc­cess­ful fin­tech in­dus­tries,” the re­port says.

“If Aus­tralia and New Zealand are to con­tinue to at­tract in­vest­ment, and move from ‘up-and-com­ing’ fin­tech cen­tres to ‘es­tab­lished re­spected’, we must en­sure that our reg­u­la­tory regimes pro­tect in­vestors while re­main­ing at least as pro­gres­sive as those of neigh­bour­ing coun­tries.”

The emer­gence of dig­i­tal plat­forms and new busi­ness mod­els is no match for cur­rent reg­u­la­tory struc­tures, many of which were de­signed with bricks-and-mor­tar firms in mind.

“It’s a chal­lenge for reg­u­la­tors to keep up as a tidal wave of new tech­nolo­gies emerge daily,” says Char­tered Ac­coun­tants ANZ in­terim chief ex­ec­u­tive, Si­mon Grant, in a state­ment.

“But it is vi­tal reg­u­la­tors un­der­stand them be­fore they even con­sider in­ter­ven­ing.”

Grant pre­dicts that reg­u­la­tors in 2030 will “be dig­i­tally trans­formed, they will col­lab­o­rate, they will have to be flex­i­ble and quick to adapt.

“Fund­ing is an im­por­tant fac­tor – the level of dig­i­tal trans­for­ma­tion re­quired by reg­u­la­tors re­quires sig­nif­i­cant gov­ern­ment in­vest­ment and cross agency shar­ing of in­for­ma­tion.”

Also dis­cussed in the re­port is the need for reg­u­la­tors to sup­ple­ment their fi­nan­cial and le­gal skill sets with tech­nol­o­gists, com­puter sci­en­tists, en­gi­neers and an­a­lysts. The work­place of the fu­ture reg­u­la­tor will mir­ror the or­gan­i­sa­tions they reg­u­late.

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