The world of 17,000 policies and 700 regulatory bodies

We live in a world full of contradictions. Dinosaurs walking around and living in castles. Blockchains, hash graphs, Artificial intelligence experiments floating above us, as labs have moved on flying platforms.

17,000 policies from more than 700 regulatory bodies, that are not digitized or harmonized. SupTech is the new lingo of a sub-vertical joining the family of Regtech and LegalTech. SupTech, technology for supervision, was baptized at the Singapore Fintech Festival last September but was born out of the desire of a younger generation of officers joining regulatory and supervisory bodies all over the world, that had no reason to be nostalgic about excel sheets and hard copies of reports. SupTech is not disruptive, nor competing with the banks and the insurance companies. It aims to upgrade regulators and supervisory bodies. Digitizing everything would mean huge efficiency gains for regulators and for those falling under their reach. It would also open up the possibility of processing the huge amounts of data “thrown in the river” surrounding the castles where the dinosaurs live.

We live in a world full of contradictions. Switzerland lost its dominance in the fund industry, mainly because the dominant design in the fund industry became MIFID, MIFID I, MIFID II and the UCITs framework. Switzerland’s regulator, FINMA, is the first Western regulatory body to go on a roadshow with the aim to educate, interact and bring up to speed the emerging Capital Markets ecosystem using blockchain technology for fundraising or tokenizing assets or business processes ( FINMA’s ICO guidelines).

We live in a world full of contradictions. I remember the times when Peter Ventura, Lazaro Campos, and Matteo Rizzi where the misfits that created “Innotribe” within SIBOS; well before Fintech went mainstream. Fast forward, to 2017 and it was no more an eye-catcher.

Already now in Spring 2018, and I find myself inspired at the Swiss Regtech conference 2018, by the Legal lead of PWC, Dr. Günther Dobrauz,  by global Regtech founders, and Laurence White, Financial Stability Board. What a change in times?

I still hear the echo of Günther’s view, that in a regulated market (like financial markets) the dominant design is driven by regulation and not technology.

Takeaways from startups

 Pawel Kuskowski, CEO of Coinfirm, a UK startup focused on KYC/AML for crypto assets and all the entities interacting with that world either directly or indirectly. It is not only the pure crypto hedge funds that may manage fiat money (trading in crypto or tokens) or manage crypto assets. There are banks offering access to wallets through partnerships, offering banking services to blockchain businesses, or managing the wealth of the growing Crypto HNW individuals. More importantly, the behavioral analysis of transaction data on blockchains (which are 100% transparent) leads to better alerts that are impossible to detect from traditional banking data analysis. Coinfirm analyzes blockchain structured data and overlays external data from the web, to complete their analytics.

Benoit Hailly, COO of Indigita, a Swiss startup offering digital cross-border regtech solutions. Imagine all the 17,000 policies on the cloud, searchable with a functionality that empowers relationship managers to face the complexity of cross-border rules and regulations. Since there is no harmonization built-in to any local or regional policy, cross-border issues are very often “irrational” but still there and therefore, to abide by.

Binah, in Hebrew means “intelligence”. Itzik Amado, VP Sales EMEA of, an Isreali data analytics, signal processing offering their services to a variety of industries. One of the most interesting aspects raised by, was about the legal and ethical issues in deep data analytics. Technology allows us today with an inexpensive camera to monitor the Heart rate HRV and make inferences from videos like Mark Zuckerberg’s testimony. The issue arises, at which point do we stop processing data. Regulators don’t have any kind of framework around this.

The 1st Swiss Regtech conference


The Swiss Regtech conference 2018 was organized by Innohub – a global ecosystem aiming to deliver innovation for corporate business challenges- in partnership with Swisscom and e-Foresight.

Laurence White, from the Financial Stability Board, co-author of “A legal theory for Autonomous Artificial agents” covered several issues. On the potential of SupTech, he spoke about how regulators could use AI and ML, to detect insider dealing or market abuse syndicates; visualized relationships of suspicious entities; identify suspicious transactions that require monitoring; identify misleading marketing and unlicensed advice. He further spoke about the potential of applying technology to increase macroprudential surveillance – i.e. ways of mitigating systemic risks. This could include Big Data analytics for economic forecasting, using ML to process text in OTC derivative markets, sentiment analysis to quantify shifts in consumer sentiment, volatility, financial stress, and liquidity; link trading data to other decision information of market players etc.

Laurence highlighted the fact that correspondent banking has suffered and the cost of remittances have gone up due to the fact the risk-averse behavior of banks. If AI was used in combination with KYC procedures, this harmful trend could be reversed, the banking system would reduce costs and financial inclusion would be facilitated.

Having addressed the potential of using technologies from regulators and in combination with those regulated, the social dangers were also mentioned. The downside of too much automation in such process is that we humans disengage and eventually, we will lose expertise to be able to program the machine.

IMGL0196Rachel Shahar, is the founder of Innohub , a platform the brings together industry players, innovation investors, and passionate inventors to develop breakthrough solutions through business-focused collaboration in agile design sprints. I am passionate about highlighting Women in Fintech in my monthly series (see here).

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.