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RegTech and superannuation funds
This document discusses how RegTech is improving risk management, compliance, governance, and supervisory services for superannuation funds. It notes that regulatory changes are a major risk and that funds are finding changes overwhelming. RegTech helps address this through automating manual processes, monitoring compliance in real-time, and analyzing large datasets. The benefits of RegTech include increased efficiency, flexibility, security, and analytics capabilities. It also carries the risk of over-reliance on machines, so collaboration is important. The document provides advice on getting started with RegTech through assessing current state, options, and immediate opportunities while also considering additional risks.
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RegTech and superannuation funds
- 1. How RegTech isimproving risk, compliance, governance and supervisory services for super funds Stephen Huppert IBRC 2017 @stephenhuppert
- 2. I’m a superannuationfund trustee/exec, why should I care about RegTech?
- 3. What do youthink will be the single biggest risk to your business in 2025? Do you think there will be more or less regulation in a decade? Source: BNP Paribas Securities Services and Australian Institute of Superannuation Trustees as at February 2015 Regulatory change
- 4. “A staggering 66reports, reviews and inquiries have impacted the superannuation industry in the past 13 years” Ian Silk, AustralianSuper CEO, April 2015
- 5. “58% of fundsregard government regulation and the Productivity Commission inquiry as their fund’s top risk. Funds are finding regulatory change overwhelming, fast and too frequent for their liking.” - Mercer 2020 Report “Many of the institutions we reviewed did not ensure internal processes consistently supported the value of ‘doing what is right’ for the customer. Many of the failings we identified led, or had the potential to lead, to poor outcomes for customers.” - ASIC Report 515 “Conduct risk...can be caused by deliberate actions or may be inadvertent, caused by inadequacies in practices, frameworks or education programs. Conduct risk can have significant ramifications for an organisation, its shareholders, clients, customers, counter-parties and the financial services industry.” - ASIC Market Supervision Update
- 7. Source: Deloitte Insidemagazine 2017 | The RegTech universe on the rise
- 8. 0 20 40 60 80 100 20/9/15 20/9/16 20/9/17 RegTech 0 20 40 60 80 100 20/9/1520/9/16 20/9/17 RegTech v FinTech Interest over time Google Trends: RegTech versus FinTech
- 9. Some of theproblems RegTech businesses are addressing include: • identity verification • fraud prevention through transaction analysis • trade tracking and analysis • anti-money laundering • know your customer compliance • monitoring culture through people analytics We are also seeing RegTech developments in the following areas: • automation of previously manual processes • collection of standardised compliance data in real time • analysis of large data sets for compliance risk and monitoring • automatic generation of reports Regtech has enormous potential to help organisations build a culture of compliance, identify learning opportunities and save time and money relating to regulatory matters. ASIC Innovation Hub
- 10. Evolution of RegTech 1 Phase1: Manual Manual data capture based on cycle times 2 Phase 2: Workflow automation Compliance software establishes consistent workflow 3 Phase 3: Continuous monitoring Applying data science to automate the back office 4 Phase 4: Predictive anaytics AI and machine learning are proactively identifying and predicting risk
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- 13. Who is doingRegTech and how can I work with them?
- 16. Platform As-A-Service CapabilitySharing Common models of the new breed of process externalisation providers Process externalisation Enabled by technological advancements, external service providers are growing and building a track record of success in driving efficiency.
- 17. What else canRegTech do for me, are there any risks I need to know about?
- 18. “Artificial intelligence canhelp people make faster, better, and cheaper decisions. But you have to be willing to collaborate with the machine, and not just treat it as either a servant or an overlord.” Anand Rao PwC Innovation Lead, Analytics
- 22. Okay – whatshould I do next?
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- 26. In the shortterm, RegTech will help firms to automate the more mundane compliance tasks and reduce operational risks associated with meeting compliance and reporting obligations. In the longer term, it will empower compliance functions to make informed risk choices based on data provided insight about the compliance risks it faces and how it mitigates and manages those risks.
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