The future of banking is algorithmic. Bringing together big data and predictive analytics is already enabling financial service providers to make better real-time decisions on loans and other products, with a more flexible, customer-centric user experience.
But if banking can be algorithmic, what about financial regulation and supervision?
Financial authorities could someday run digitally, but getting there is not going to be easy. In many countries, regulators today often use fax machines, let alone cloud-based software and analytics. And yet, the future of the financial sector depends on modernizing regulatory authorities.
The fallout from the 2008 financial crisis has led to regulators, especially in more developed economies, asking for more data from providers and more scrutiny of that data. Developed markets have seen a 492 percent increase in regulatory changes between 2008 and 2015, especially in anti-money laundering and consumer protection. It was famously reported that by the end of 2014, Citi had added a total of 30,000 people just working on regulatory compliance.
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But if banking can be algorithmic, what about financial regulation and supervision?
Financial authorities could someday run digitally, but getting there is not going to be easy. In many countries, regulators today often use fax machines, let alone cloud-based software and analytics. And yet, the future of the financial sector depends on modernizing regulatory authorities.
The fallout from the 2008 financial crisis has led to regulators, especially in more developed economies, asking for more data from providers and more scrutiny of that data. Developed markets have seen a 492 percent increase in regulatory changes between 2008 and 2015, especially in anti-money laundering and consumer protection. It was famously reported that by the end of 2014, Citi had added a total of 30,000 people just working on regulatory compliance.
Read More
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