Securities Finance Technology News | FCA will deploy extensive technology solutions

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As a key driver of the Financial Conduct Authority’s (FCA) “efficiency improvement” over the past year, the organization has announced plans to deploy extensive technology solutions in the future.

FCA chief executive Nikhil Rathi revealed that “significant progress” had been made on the authority’s backlog due to investment in automation. Rathi also praises the FCA’s increasingly robust gateway after lessons learned from independent reviews. Currently, one in five companies is initially refused approval, compared to one in 14 in 2021.

Speaking about the body’s role in the context of the UK’s changing regulatory landscape, Rathi said the past two years had been punctuated by multiple events “one every hundred years”.

A number of unprecedented disruptive market events also occurred, including the default of Archegos and “extreme turbulence” in the commodity and fixed income markets.

In each case, there was significant use of leverage – sometimes hidden leverage – concentrated counterparty risk and period-based margin modeling that failed to respond to the tensions that arose. “crystallized,” Rathi said.

Reviewing each event, Rathi highlighted the need for improved regulatory and risk reporting, as well as national and international oversight – a priority for the authority.

The chief executive also noted the FCA’s ongoing work with the Bank of England on the use of artificial intelligence (AI) in the regulatory framework. FCA’s AI discussion paper examines the benefits, risks and suggested solutions regarding this technology, and encourages industry to engage with the paper to create the right framework for the future.

Similarly, the regulator’s consultation document on Big tech examines the innovation that tech giants could bring to financial services, as well as the risks of their potential dominance that could hurt consumer outcomes. The consultation process will inform FCA’s approach to digital markets.

In response, Dr Henry Balani, Global Head of Industry and Regulatory Affairs for Encompass Corporation, comments: “Amidst a turbulent economy and a complicated geopolitical landscape, the UK faces uncertain times. and difficult.

“It is essential that business and government remain committed to meeting the highest regulatory standards and encouraging innovation as a key element in order to achieve as much stability and growth as possible – now and in the future. coming.”

Balani notes that much remains to be done to further improve the regulatory framework and overall compliance in the UK. He concludes: “As we move forward, we must continue to focus not only on regulatory oversight, but also on fostering innovation and using the latest technologies to help businesses when they are is about their own compliance processes as the landscape evolves.

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