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What To Know in 2023 Regarding Financial Regulatory Compliance

What To Know in 2023 Regarding Financial Regulatory Compliance

Recent occurrences, particularly stories about global sanctions systems, have prompted regulatory organizations to respond vigorously. It is anticipated that authorities will continue to intervene through laws and enforcement in 2023 to combat financial crime truly. The European Commission has already completed a comprehensive evaluation of the most significant anti-money laundering (AML) and terrorist funding risks and is preparing to offer a comprehensive legislative package to address these risks globally.

Partnering with niche Banking Technology domain specialists like Maveric Systems creates unprecedented insights for FIs in regulatory compliance and risk management.

Here is a roundup of the critical areas for 2023 Financial Regulatory Compliance.

Capital shifts

The federal banking agencies (FRB, OCC, and FDIC) have suggested that they will evaluate capital mechanisms and how they promote the resilience of the financial system, both individually and collectively, at financial institutions. When calibrating capital requirements, the FRB has indicated that agencies will strive to minimize unexpected consequences, limit chances for gaming, and prevent high compliance costs that do not yield risk reduction.

Technology-led Resilience

As the popularity of the cloud, e-communication technologies and platforms, and digital tools increases alongside the number of connected service providers, regulators warn of potential hazards, such as information security events, cyber attacks like ransomware or virus, and service failures. Regulators will continue to scrutinize the adequacy of a company’s contemporary technology risk management program; they will pay particular attention to significant operational changes using new technology advances (e.g., cloud, AI, digitalization of risk management processes).

Risk Management

Regulators seek to improve data risk management, particularly in governance incident reporting, vulnerability management, and identity/access control. Companies should develop frameworks for scoping their programs that are both realistic and defensible, taking into account regulatory regulations and expectations as well as business considerations.

Expanding the scope of fairness

Regulators have broadened their expectations of “fairness” to include all consumer/investor products and services throughout the product life cycle and fair lending rules and credit products. For “unfair” outcomes to result in consumer/investor harm, they need not be intentional, and regulators will focus on companies’ attempts to guarantee a “fair and balanced” approach for all consumers.

Cryptos and Blockchain Advisory

Agencies will continue to issue danger warnings and seek to codify greater authority and safeguards in the payments and digital asset space. Topics will vary from stable coins for payments and digital currencies issued by central banks (CBDCs) to regulatory agencies, frameworks, and financial stability threats.

Financial Crime Management

Financial service providers continually try to mitigate fraud and financial crime as ongoing concerns. Changing technology advancements, geopolitical events, and interconnected and interdependent financial networks may raise these risks, exposures, and complexity, especially as criminals become more skilled. Regulators will remain worried about financing terrorism, beneficial ownership, sanctions/tax evasion, consumer fraud, and potential compliance issues.

Four Crucial Themes for Financial Regulatory Compliance

  1. Demand for improved data governance and reporting: Increasing data availability and enhancing data quality are two crucial concerns for financial institutions. As bank regulators become increasingly dependent on data, they are accelerating the already elevated prioritization of strategic data programs within the banks they oversee.
  2. Cyber and information technology (IT) risk: Regulators are increasingly concerned about the absence of solid cyber security policies and processes to protect the assets and data of a firm. They continue to stress the enhanced participation and accountability of the board and senior leadership in establishing the organization’s cyber security strategy and supervising its cyber security program.
  3. Sanctions and the Bank Secrecy Act (BSA)/anti-money laundering (AML): Anticipate three critical issues at the forefront of regulators’ priorities in 2023: the rising presence of digital assets throughout the financial ecosystem and the handling of associated AML risks.
  4. Consumer protection and financial inclusion: Anticipate that regulators will continue safeguarding consumers from harm in 2023, particularly in the regulatory periphery. All parties must understand and resolve the legal arrangements, cultural differences, and potential governance gaps between banks and nonbanks to ensure successful compliance in light of ongoing regulatory scrutiny.

Bank Regulatory Agenda in 2023

Conclusion

The disruptive factors of 2022, such as high inflation, interest rate volatility, the Russia-Ukraine conflict, the lingering effects of the pandemic, stock and bond market declines, and events in the crypto asset markets, have influenced banking regulatory perspectives and will likely have an impact on the direction of banking regulations in 2023.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Need to Know About Regulatory Compliance in the Cloud

Need to Know About Regulatory Compliance in the Cloud

From $313 billion in 2020, it is predicted that global spending on cloud services would increase to $482 billion in 2023. Additionally, the market’s value will surpass $1,250 billion by 2028.

As more businesses use the cloud to boost time-to-market, cut costs, and increase organizational agility and resilience, it stands to reason that they would be interested in learning more about compliance reporting and cloud compliance. Cloud Compliance is a vast area that is continuously getting updated and banking and FIs are well served consulting with domain specialists like Maveric Systems.

Does Cloud Compliance Matter?

Many industry rules and regional/national laws have recently been developed to protect customer privacy and data security. Simply put, businesses must safeguard the privacy and data of their clients or risk legal repercussions. Depending on the sector, organizations might need to abide by rules and laws like HIPAA, PCI DSS, SOX, or GDPR. The workflows, procedures, and systems must all follow the rules established by these regulatory frameworks. Appropriate departments must make sure that any data stored in the cloud infrastructure complies with all applicable data protection and privacy laws. Non-compliance can result in very expensive consequences. More than reputation losses, there are negative consequences for revenues and profitability, not to mention fines and lawsuits.

Does Cloud Compliance Matter?

Cloud compliance components

The criteria for cloud compliance will change depending on your industry and the rules that govern your firm. Below, are the common elements that influence general cloud compliance.

  1. Specific guidelines are provided for the proper handling of data in the cloud by some sectors. These adhere to compliance criteria for cloud security. For instance, ISO 27017 contains cloud-specific security rules. That entails putting in place particular security measures related to how your cloud environment is set up. A business associate agreement between a covered entity and its cloud service provider (CSP), under which the CSP is responsible for adhering to HIPAA Rules, is also required under HIPAA.
  2. Statutes and rules. State, federal, and international laws and regulations all influence the needs for cloud compliance. For cloud compliance, data privacy, data protection and localization, and cyber security, it’s critical to be aware of local laws and regulations. HIPAA, PCI DSS, and SOX are a few typical laws.
  3. Cloud governance controls offer explicit security regulations on how to use (and how not to use) the cloud and assist in managing a company’s data within the cloud. Businesses should have policies in place for managing, sharing, and tracking data in the cloud and increasing cloud usage. These ought to address cloud strategy ownership and accountability as well.
  4. A formal agreement between two or more parties is defined by a contract. When a business signs a contract, it is responsible for upholding the conditions. If you don’t, you risk receiving harsh financial penalties. An organisation that handles or keeps credit card data most likely has a contract with credit card providers that calls for it to meet particular PCI DSS requirements (PCI-DSS).

Best Practices for meeting regulatory cloud compliance.

  1. Understand your compliance requirements
  2. Recognize legal duties
  3. Control access to information.
  4. Conduct regular audits
  5. Understanding how data is stored
  6. Encrypt everything, always.

Conclusion

The majority of businesses are utilizing the cloud because there are sound commercial justifications for doing so. The use of the cloud is not prohibited by the legislation. But it does have a substantial influence. When shifting to the cloud, it’s crucial to understand which nations will process your data, what regulations will be in place, what effect they will have, and how to comply with them using a risk-based strategy. Due to the wide variety of rules, including those governing data protection, data localization, and data sovereignty, it may be challenging. You should also consider regulations governing information access or interception, which may allow governments or other parties to access your cloud-based data. The laws of other nations may also be applicable. It’s crucial to understand the security precautions that you must take in accordance with the law.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric Systems accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric Systems teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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How to Comply with Banking Regulations

How to Comply with Banking Regulations

Gaining the customer’s confidence is the goal of compliance across all banking functions. Treating customers somewhat is the cornerstone of this imperative. When creating an investment product, banks must ensure that it fulfills promises and that the customer is fully aware of the risk implications. Moreover, when handling sensitive customer data, FIs agree to abide by it to prevent loss and abuse. Ultimately, to sidestep market manipulation and negate detrimental customer impact, the banking industry’s deep reliance on regulations increases the trust that maximizes business.

Deep diving into Banking Compliance

The regulatory standards include operational practices and procedures that are jurisdictionally relevant to the geography bank’s geographies. Following the regulatory mandate makes sense to partner with seasoned technologists with deep domain experience in the Reg-Tech space, like Maveric Systems.

This step assumes importance as the bank or the FI must incorporate procedures that meet internal and external stakeholder requirements. This standard becomes crucial for deterring, identifying, and investigating violations or non-compliance.

Everything You Need to Know about Bank Compliance

An efficient bank compliance program ensures that employees understand (and are accountable) for compliance risks, as well as necessary mitigation methods that are in place. Furthermore, when employees are assigned specific responsibilities, they must be backed with resources and training that positions them for maximal success. This crucial step saves the banks from financial penalties, legal action in civil and criminal courts, and reputational harm.

Best practices for Banking Regulations

  1. Appointing a Compliance Overseer
  2. Simplifying the sharing, storage, and retrieval of regulatory information.
  3. Staff education and training
  4. Signing off on staff accountabilities for regulation adherence.
  5. Leadership focuses on establishing a compliance culture that values compliance, ethics, openness, and integrity.

Approaches for creating watertight banking regulation practices

Begin by pulling through a comprehensive list of local laws and regulations that affect all the business lines and products manufactured in the region and country. The next step involves identifying the relevant requirements (or clauses) that apply to those business lines and products within those laws. Moreover, keeping track of all revisions and amendments to the rules and regulations must be maintained and audited. This step also extends to locating gaps in the business’ documentation of training manuals, policies, and procedures. Finally, the organization has to implement and set up workflow software that controls risks, reporting, and issues that broadly influence the business.

Conclusion

In sum, the foundation of banking compliance lies in the FI’s fundamental principles of integrity, process robustness, and fair customer services that ensure happy shareholders and earn society’s trust, including the regulatory authorities.

About Maveric

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric Systems teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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The Future of Fintech Risk and Regulatory Compliance Services

The Future of Fintech Risk and Regulatory Compliance Services

It’s reasonable to say that fintech’s potential for the future has entered the mainstream. However, elevated status brings with it heightened scrutiny from authorities. The new regulatory stance toward fintech startups is something that traditional financial institutions like banks and credit unions should pay special attention to.

Future of Fintech-Risk and Regulatory Compliance

The Current Landscape

Financial technology firms have had a hard time getting along with regulators, and the opposite is true. Banks and credit unions that work with Fintechs in specific sectors should be aware that Fintechs are still working out how they fit in with anti-money laundering (AML) legislation that governs the banking industry. Financial technology companies must be prepared to follow anti-money-laundering laws or face the repercussions.

The way forward

Even if Fintechs don’t consider themselves banks, they must adhere to all applicable safety and security standards. Partnerships between Fintechs and financial institutions are paving the path for banks to grow despite the industry’s apparent struggles with how new fintech inventions and their adopters will disrupt the marketplace.

For more market exposure from their current customer base, most Fintechs today have recognized the attractiveness of partnering with established banks and financial institutions, including Revolut and other neo-banks.

Fintech risks and compliance, on the other hand, allow Fintechs to sell their technologies and solutions to clients (likely banks and financial institutions) that don’t have the resources to create them on their own.

Areas of interest for fintech regulation

Partnership with domain experts

Businesses in the modern era must contend with an increasingly complex regulatory landscape and an operating environment that is frequently unstable. Reimagine the situation so that value is preserved and generated, and transform regulations into possibilities. With Maveric Systems, Gain expertise in leading, navigating, and disrupting to speed up results by mitigating legal and business dangers.

Importance of regulation for Fintech’s

While safety and conformity are crucial, there are other benefits to Fintechs being regulated.

1. Trust can only be built upon a solid foundation of regulation. Regulation compliance is integral to building credibility and confidence for any business in the financial sector.

2. Regulation creates parity in the marketplace. Businesses in the same market have similar obstacles, which is suitable for healthy competition.

3. Fintechs will be able to expand more quickly if they comply with regulations. To do so, they may introduce new goods and services, upgrade to a full banking license, or enter new markets.

The Tide is Turning

Recent developments in Fintech risk and compliance requirements have experts anticipating these shifts.

To compete in a larger market and avoid the varying regulatory requirements, several Fintechs are incorporating bank charters.

Financial institutions are actively pursuing Fintechs to serve modern customers’ needs better and reap operational efficiencies. Some commonalities can be seen between the many Fintech-based origins and fact patterns surrounding regulatory measures, including the following:

  • They draw attention to the dangers to banks’ security and reputation that stem from operational, regulatory, and reputational factors.
  • Several other measures have also been taken to ensure that customers of all Fintech services are afforded the necessary levels of legal protection.
  • Like banks, but with an emphasis on speed and convenience, these businesses refrain from employing nonstandard distribution methods.

Conclusion

Success in regulated markets can be improved regardless of whether a fintech company becomes a chartered institution or continues to operate as it does today, but either way, sound risk management procedures should be in place. Compliance could make a business more appealing to consumers in light of rising regulatory scrutiny and the necessity for internal sound controls that allow for thorough client profiling and positive interaction.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Regulatory Compliance Needs for 2022 in the Financial Services Industry

Regulatory Compliance Needs for 2022 in the Financial Services Industry

Laundering of funds and funding of terrorism. Climatic peril. Both internal and external fraud. Threat to the company’s operations. Threats to the confidentiality of data and computer systems. Corruption and bribery. Each year presents an extended and more complex list of dangers and elements that banking compliance departments must monitor and respond to.  

Chief compliance officers (CCOs) and teams must take a holistic look at their functions to understand the problems and opportunities as the pandemic recedes. Today’s compliance officers must find solutions for many interrelated issues. They need to increase the efficacy and efficiency of their compliance activities and make intelligent use of data and technology.  

Three Essential Regulatory Compliance Needs for 2022 

In addition to the risks associated with ineffectively interpreting the regulatory agenda and managing the expectations of external stakeholders, the unprecedented amount of global regulation is imposing substantial demands on the change capability of banks. It is an assessment that premium Banking Technology partners, like Maveric Systems, monitor.  

The tech-powered compliance function 

Corporate growth is sharply focused as compliance departments plan to invest more in data and technology and combine it with a data-driven strategy. Technology is expected to bring an improved understanding of policies and procedures, monitoring and oversight, remediation, and, importantly, cost reduction.  

Road-testing Compliance Programs by going Agile 

Testing out compliance programs offers nuances and gap areas for banks. From culture, data, internal standards, and training, FIs understand where they stand compared to the competition. By embracing Agile as a philosophy, banks can progress toward digital maturity faster. Frequent compliance testing also exposes flaws and oversights in a bank’s response speeds and effectiveness.  

Creating an integrated solution to stay ahead of the regulatory change pipeline 

Regulatory compliance is a multidimensional theme for banks that intend to stay ahead of the curve. From planning portfolios (managing delivery across levels and enacting governance that facilitates transparency) to coordinating regulatory needs (being aware of the shifting regulatory landscape and iterating scope management) and, finally, adopting superior strategic design (reconciling synergies between interdependent systems), FIs must pool energies to create integrated solutions.  

Conclusion.  

Looking ahead, the compliance divisions of most banks need to shift their focus from advisory to more proactive risk management and monitoring. Putting this into effect entails becoming an active co-owner of risks and providing advice on statutory rules, regulations, and laws, all while maintaining impartial oversight of the control system. This would precisely translate into:  

  1. Thinking creatively about how operational requirements are affected by laws, rules, and regulations across enterprises and processes,  
  2. Establishing criteria for the significance of risk (for example, material risk, tolerance levels, and risk appetite),  
  3. And finally, maintaining a thorough system for identifying and evaluating potential hazards (objective risk-assessment scorecards and risk-measurement methodology) 

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them. 

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.  

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore. 

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