A Regtech Manifesto:
Redesigning Financial Regulation
for the Digital Age

Achieving fair finance will require new regulatory technology. AIR’s whitepaper, A Regtech Manifesto, explains why and offers the roadmap for converting to a digital regulatory system. One US agency head has said it should be “the bible for every regulator.”

Today’s regulatory processes were designed long ago, on paper. They use legacy technology and require extensive manual work. FDIC examiners, for example, spend 450,000 hours a year manually reviewing loan files that are already largely digitized. Regulators rely on fragments of information – sampling of files, reports that lag months behind real time, and aggregated data that can mask problems like credit discrimination and rising systemic risk -- because they don’t yet have tools that can ingest and analyze data in digital form. The Bank of England says that reviewing all the information it receives would take the equivalent of every analyst reading the Complete Works of Shakespeare every day, twice a day, 365 days a year.

Until recently, the current methods were the best available. Today, however, regulators throughout the world are exploring new strategies for leveraging digitization and artificial intelligence to do their work better, faster, and cheaper, all at once.

This conversion will take time but is urgent, driven by the need for regulators to keep pace with the technology transformation of the markets they oversee. The Regtech Manifesto lays out what a “digitally-native” regulatory system will look like and how to build it. The paper is a Request for Comment (RFC), inviting input from the entire regulatory community.

We are accepting comments the following ways:

-Directly on this webpage

-Through email to hello@regulationinnovation.org

-Through a shared Google Document

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Max Pool
Max Pool
August 1, 2020 12:07 am

This paper is a well thought and complete landscape of the problems that are quickly facing regulation, banks, and the technologists attempting to serve the industry. The quick recognition that the hurdles in the journey towards implementation and adoption come in many flavors (i.e. technical, social, and legal barriers) was especially appreciated. Before I field the request for comments, a disclaimer: I have never been a regulator so I can only speak from my experiences and perspective.  As a co-founder and principal technologist of a fintech (Sycorr) that serves in the IAM space between BankOps, SecOps, and RegTech – my view… Read more »

Carl Hoffman
Carl Hoffman
August 10, 2020 4:37 pm

I’m genuinely enthusiastic about the Regtech Manifesto. You’ve identified the key elements of a regulatory framework more efficient, transparent, and equitable than what exists in most countries today. I believe trying to push new ideas through old institutions will take more years than any of us have. Compare the pace of regulatory progress with this collaborative history regarding the Novel 2019 coronavirus genome. Such rapid collaboration would be impossible if the only paths for information exchange were refereed journals and government-approved channels. I’m optimistic that vaccines will be widely available within two years of sequencing the genome. With all due respect to your profession, developing vaccines is… Read more »

Ben Morris
Ben Morris
August 23, 2020 6:23 pm

This manifesto does a fantastic job of framing the issues and setting a path forward. It is the beginning of a critically important conversation.

I’ve made a number of other detailed comments here:

Robert Merrick
Robert Merrick
August 26, 2020 8:58 pm

As a regulatory GRC professional based in Toronto, I am pleased to offer my Canadian perspective on RegTech and the work that has to be undertaken in order to transition to a “digitally-native” framework as AIR put so well in its RegTech Manifesto. It seems to me that there is mutual benefit in Canadian and U.S. collaboration on fostering the RegTech transition. Canada’s financial landscape has a broad mix of players with the large FIs playing a central role in setting the tone for the economy and its participants. At the same time, participants are operating within a highly regulated… Read more »

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