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Regulatory Compliance – The US Impact

Regulatory Compliance – The US Impact

Federal banking authorities are monitoring how the banking industry is changing. On the one hand, banking authorities are utilizing their current supervisory authority to safeguard their operations. On the other, banks are strongly discouraged from dealing with cryptocurrency assets due to state, federal, and international regulatory activities.

Expanding data accessibility and enhancing data quality are top concerns. To begin with, the subject of BFSI regulatory compliance (program mandate and components) is a complex one.

As significant questions face FIs in 2023 on how regulatory frameworks should be extended to counter consumer risks, a vital question comes to the fore. How must banking overseers raise their priorities to become more data-dependent?

The perils for not doing so are immediate and well-known.

Consider this: RBI (India’s Central Bank) imposed a penalty of INR 3.06 Crores on Amazon Pay Services for non-compliance with KYC and prepaid instruments.

 

Regulatory Compliance – The US Impact

Section 1071 of the Dodd-Frank Act – New Rules for Small Business Data Collection

The section amends the Equal Credit Opportunity Act (ECOA) that requires FIs to aggregate, maintain and submit data to CPFB (Consumer Financial Protection Bureau). Most earmarked businesses (minority-owned, women-owned) with at least 25 small credit transactions in the last 24 months are to comply with business data requirements before March 2023.

Adverse Impact on Cryptocurrency Sector

Due to increased caution brought on by the industry’s instability, Crypto businesses face an uphill journey to obtain institutional funding. The plummeting retail investors’ interest in cryptocurrency adds to the substantial drop in Venture Capital. Consider the panic, as a report estimates that $540Mn was money-laundered (Crypto cash since 2020) using a service called RenBridge.

Impact of Durbin Amendment on Banking-as-a-service

The Durbin Amendment does not apply to banks with assets under $10 billion, and these institutions are permitted to impose higher interchange fees for processing debit card transactions. The law impacts smaller banks’ tactics that support debit card systems offered by Fintechs, where the partners often split interchange revenue. There is a conflict for smaller banks in BaaS between seeking growth and reaping the rewards of staying under the $10 billion asset threshold.

Will 2023 see a long-term shift in debit programs?

A Sneak Peek – Maveric’s Comprehensive RegTech Study

As banks increasingly rely on digital assets for greater oversight and clarity in the regulatory fragmentation geopolitical setup, Maveric’s report empowers C-Suite with a powerful tool to navigate a climate focused on economic recovery and customer impact.

The 2023 Maveric RegTech report provides banking leaders with a comprehensive view of significant regulatory changes across regions, platforms, and tools

The Way Forward

Undoubtedly, the winning combination for BFSI regulatory compliance outlook is to balance innovation with consumer protection. However, the financial services sector is facing difficult operating conditions as a result of a complicated mix of factors including high inflation, erratic interest rates, interruptions in the supply chain, and weakening economies. In light of this, boards and executive teams ought to ask- what measures are being taken to support consumers and maintain resilience in the face of impending economic difficulties. The way BFSI entities respond to that question will be influenced by their solid understanding of the constantly changing regulatory environment.

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Regulatory Compliance – Orchestrating 2023’s Banking Growth

Regulatory Compliance – Orchestrating 2023’s Banking Growth

Globally, the complexity faced by FIs, and banks are expanding.

The causal factors are many – ESG compliance, Heightened resilience standards after the COVID-19 crisis, cyber assaults, and the impact of Russia’s invasion of Ukraine on energy markets

Evolving regulations in response to those challenges complicate matters even more. Firms that unlock new avenues of growth will reinforce competitive advantages by anticipating regulatory changes. For this, banking leaders should comprehend the regulatory landscape, but even before that, they must answer the question: what is the need to invest in digital or technology?

The importance of Regulatory Compliance Swells Across.

In UAE’s 2023 launched FIT (Financial Infrastructure Transformation) program, its central bank (CBUAE) has earmarked the establishment of financial cloud infrastructure and eKYC and open finance platforms to improve regulatory compliance.

“The FIT program embodies the directions and aspirations of our wise leadership towards digitizing the economy and developing the financial sector,” says HE Khaled Mohamed Balama, governor of the CBUAE.

2023 is about the Integrated Risk and Compliance Function.

Continuing from last year, the compliance functions becoming more tech-enabled, the enterprise risk programs embracing a higher degree of agile principles, and the multidimensional portfolio management systems are integrative approaches that will proliferate.

How will the RegTech winners differentiate themselves?

  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. Maintaining a thorough system for identifying and evaluating potential hazards (objective risk-assessment scorecards and risk-measurement methodology)

A Sneak Peek

Coming soon is the 2023 Maveric RegTech report that provides banking leaders with a comprehensive view of significant regulatory changes across regions, platforms, and tools.

Report Sections

  • A summary of the significant regulatory changes and implications.
  • The enabling platforms – Bifurcated by established and emerging platforms and information necessary to evaluate their use.
  • Prevalent tools – Bifurcated by established and emerging uses.

Jurisdictions covered

  • EU and US
  • Regulation – FCM and Regulatory reporting, including Crypto, ESG, and DORA.

Platforms and tools covered

  • Risk management
  • Transaction monitoring and reporting
  • Customer identification and AML/KYC
  • Regulatory intelligence
  • Regulatory reporting
  • Data tools aligned to Reg Tech

The Way Forward

Regulatory changes care about something other than the size or resources of a business. No matter how many resources it has, any organization will have a hard time keeping up with the size and number of regulatory changes. Everyone is affected by changes in regulations in the same way, which raises the same worries about being able to take it all in and put it to use.

Priority number one in addressing these challenges is the implementation of technology. In an environment where banks are subject to remote supervision, regulators anticipate enterprise-wide risk management systems that connect diverse elements of an organization and ensure that everyone is executing the change uniformly.

Maveric’s Comprehensive RegTech Study

As banks increasingly rely on digital assets for greater oversight and clarity in the regulatory fragmentation geopolitical setup, Maveric’s report empowers C-Suite with a powerful tool to navigate a climate focused on economic recovery and customer impact.

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Account Opening and Customer Onboarding – Where does the Moment of Truth lie for Banks?

Account Opening and Customer Onboarding – Where does the Moment of Truth lie for Banks?

The non-profit member association, NPC, or Nordic Payments Council creates and manages Nordic schemes that facilitate payments. Combining four Nordic Bankers associations, banks, and payment institutions covered by the PSD2 directive, Camilla’s primary mandate is to harmonize payments across the regions.

Balancing the Payment Means and Payments Acceptance.

Post-COVID, digital banking adoption has accelerated without precedent. The game has moved on – from digital enablement to digital transformation. Innovations in Fintech and Payments are shaking up legacy infrastructures like never before.

Camilla is no stranger to the phenomenon. In the years that she was at SEB, one of the leading Nordic FIs, she was involved in a game-changing project that went on to become the P27 – an example where payment means and payment acceptance are seen as two sides of the same coin, and an open-minded approach is taken to solve the ‘chicken-egg’ challenge.

P27 aims to build the world’s first real-time, cross-border payment system in multiple currencies.

It is a joint initiative by Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB, and Swedbank, that explores possibilities of establishing a pan-Nordic payment infrastructure for domestic and cross-border payments in the Nordic currencies and the Euro.

Rubbing shoulders with the formidable EPC (European Payments Council)

Implementing ISO standards, strengthening security, and promoting transparency are all aimed at shaping the NPC’s vision to be relevant long-term. Creating new-age schemes that address market needs before they become a demand adds to NPC’s influence in an important market that extends well across the continent.

Forging a shared infrastructure to create frictionless interlinked cross-border payments.

A currency-agnostic platform with real-time payments and batch clearing – like the P27 – works because the rulebooks are maintained by an independent organization, freeing up the payment(s) schedules to be used by any clearing house or tech company.

Given the innovation in Payments infrastructure, how do the NORDICS benefits translate for the end customer?

Gaining access to innovative solutions faster than in similar-sized markets, effecting cost take-outs by combining digital readiness with inter-banks collaboration and looking out for automated solutions (like conversational IoT and 5G) to bring higher levels of convenience.

Essentially, P27 breaks down export-import barriers for banks or Fintechs alone and across companies in B2C and D2C spaces.

What are the overall learnings from Nordics Payments Infrastructure?

Collaborate at the vision and organizational mission level so that a common innovation ground can be set and sandboxed. As the gains from P27 are realized in deeper measures, the imperative must be replicating it across the globe for a truly connected global high-speed payments infrastructure.

As they say, a journey of a thousand miles starts with a single step.

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What makes (the mostly) contactless and cashless NORDICS tick? Learnings from the region’s Payments Narrative

What makes (the mostly) contactless and cashless NORDICS tick? Learnings from the region’s Payments Narrative

The non-profit member association, NPC, or Nordic Payments Council creates and manages Nordic schemes that facilitate payments. Combining four Nordic Bankers associations, banks, and payment institutions covered by the PSD2 directive, Camilla’s primary mandate is to harmonize payments across the regions.

Balancing the Payment Means and Payments Acceptance.

Post-COVID, digital banking adoption has accelerated without precedent. The game has moved on – from digital enablement to digital transformation. Innovations in Fintech and Payments are shaking up legacy infrastructures like never before.

Camilla is no stranger to the phenomenon. In the years that she was at SEB, one of the leading Nordic FIs, she was involved in a game-changing project that went on to become the P27 – an example where payment means and payment acceptance are seen as two sides of the same coin, and an open-minded approach is taken to solve the ‘chicken-egg’ challenge.

P27 aims to build the world’s first real-time, cross-border payment system in multiple currencies.

It is a joint initiative by Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB, and Swedbank, that explores possibilities of establishing a pan-Nordic payment infrastructure for domestic and cross-border payments in the Nordic currencies and the Euro.

Rubbing shoulders with the formidable EPC (European Payments Council)

Implementing ISO standards, strengthening security, and promoting transparency are all aimed at shaping the NPC’s vision to be relevant long-term. Creating new-age schemes that address market needs before they become a demand adds to NPC’s influence in an important market that extends well across the continent.

Forging a shared infrastructure to create frictionless interlinked cross-border payments.

A currency-agnostic platform with real-time payments and batch clearing – like the P27 – works because the rulebooks are maintained by an independent organization, freeing up the payment(s) schedules to be used by any clearing house or tech company.

Given the innovation in Payments infrastructure, how do the NORDICS benefits translate for the end customer?

Gaining access to innovative solutions faster than in similar-sized markets, effecting cost take-outs by combining digital readiness with inter-banks collaboration and looking out for automated solutions (like conversational IoT and 5G) to bring higher levels of convenience.

Essentially, P27 breaks down export-import barriers for banks or Fintechs alone and across companies in B2C and D2C spaces.

What are the overall learnings from Nordics Payments Infrastructure?

Collaborate at the vision and organizational mission level so that a common innovation ground can be set and sandboxed. As the gains from P27 are realized in deeper measures, the imperative must be replicating it across the globe for a truly connected global high-speed payments infrastructure.

As they say, a journey of a thousand miles starts with a single step.

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