G20 TechSprint 2020

G20 TechSprint

TechSprint was a joint initiative of the BIS Innovation Hub (BISIH) and the Saudi G20 Presidency designed to showcase the potential for new innovative technologies to resolve operational problems in the areas of regulatory compliance (RegTech) and supervision (SupTech). It was implemented with the support of the Monetary Authority of Singapore (MAS), the Saudi Arabian Monetary Authority (SAMA), the Financial Stability Board (FSB), API Exchange (APIX), and Regtech for Regulators Accelerator (R2A).

The three winning firms - FNA, Tookitaki and ISDA-REGnosys - tackled challenges of dynamic information sharing, monitoring and surveillance, and regulatory reporting.

Problem statements

Regulatory reporting and ensuring compliance: With increasing digitalisation, are there upstream solutions and tools that would enable regulators to easily prepare and transmit machine-readable and machine-executable regulations to their regulated entities (i.e. codified regulations that are sent to regulated entities that would allow for regulatory data to be easily and autonomously mined and reported). This should result in greater regulatory compliance, lower regulatory burden and cost, improve data quality and consistency in regulatory reporting, as well as engender more timely surveillance by the regulatory authorities. 

Solutions should be deployable at least within a jurisdiction (with teams responsible for demonstrating this ability), and configurable for deployment across multiple jurisdictions, especially in areas of regulation where there are internationally accepted and harmonised data requirements (e.g. established data identifiers such as the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC), the Unique Transaction (UTI) and the Unique Product Identifier (UPI)). Solutions could also include the development of a common code repository shared between the regulators and regulated entities to push and pull required regulatory reports/data via authorised APIs.

Monitoring AML/CFT Risks: Crypto assets have garnered significant interest from the financial industry. However, AML/CFT risk in the crypto asset space has been a constant concern for regulators. 

How can AI (artificial intelligence), ML (machine-learning), data visualisation tools and other technologies help financial institutions conduct better monitoring and report suspicious activities in more timely and accurate manner for AML/CFT purposes, as well as help crypto assets service providers comply with AML/CFT regulations? A particular area of interest would be tools to monitor against AML/CFT risks at the main fiat-to-crypto conversion gateways (i.e. help gatekeepers identify suspicious users/transactions in a timely and accurate manner).

Utilizing Innovation to support the efforts in response to Covid-19 

On March 6, 2020 G20 Finance Ministers and Central Bank Governors issued a statement on COVID-19 stating that they will work closely with the relevant international organizations with a view to sharing information, among other key areas of collaboration. The G20 TechSprint aspires to contribute to the information sharing element, with the view to supporting effective collaboration amongst financial supervisors and regulators across borders given the global reach of the pandemic. 

The COVID-19 pandemic is unprecedented and has called for extraordinary measures by all stakeholders to mitigate further risks by supporting households and businesses. The effectiveness of these measures calls for strong and frequent coordination and cooperation amongst financial regulators and supervisors. To that end, the G20 TechSprint puts forward the following problem statement. 

Dynamic Information Sharing for Supervisors and Regulators in Response to Crises (both natural or man-made) that Impact Global Financial Stability: 

Since the onset of the Covid-19 global pandemic, supervisors and regulators have been coordinating on a frequent basis with the aim of supporting the global economy by ensuring the continued functioning of our global financial system. The pandemic has called for a dynamic response, where regulatory and supervisory measures are implemented on an almost daily basis. 

Can a technological solution be developed to facilitate the sharing of critical information among regulators and supervisors? Through the use of an application that sources both structured data (e.g. financial regulatory reports) and publicly available information that may be unstructured (e.g. releases on national authorities' websites on regulatory and supervisory measures in response to the crisis, market feeds on developing events and social media sources, etc) on a near real-time basis. The solution should offer a comprehensive overview of the measures undertaken within and across jurisdictions in terms of the regulatory and supervisory responses, categorized across the different components of the financial system. 

This solution should be applicable and deployable in response to a crisis that could have an impact on global financial stability. An ideal solution would incorporate user-friendly interface, with a searchable database on supervisory and regulatory measures currently in place, and dashboarding tools that would allow for context and customisations based on differing user requirements (e.g. focus by regions and/or on different focal parameters such as capital and liquidity risk). Solutions that take advantage of machine learning to increase the speed of accurately filtering between noise and signals would aid effective monitoring of market developments, especially in these critical moments. 

A bonus outcome of the solution is if it could also be easily deployed for regulatory oversight at the level of individual firms, such as in aiding supervisors to quickly assess and diagnose the level of risk to specific financial institutions.

Private firms competed and developed innovative solutions to these problems using the cloud-based APIX platform that facilitates registration, prototype building and online judging of submissions. An independent international expert panel chose the winning solutions.