The Financial Industry Regulation Authority (FINRA) released a white paper this week outlining recent regulatory technology developments in the securities industry and their potential impacts.
In the report, FINRA highlights five areas where regulatory technology, or regtech, have been leveraged. These areas include surveillance and monitoring, customer identification and anti-money laundering compliance, regulatory intelligence, reporting and risk management, and investor risk assessment. These innovations provide improved risk management and more efficiency through automation.
“Regulatory technology is playing an ever-increasing role for broker dealers and regulators must ensure they are keeping pace with industry innovations,” Haimera Workie, senior director of FINRA’s Office of Emerging Regulatory Issues, said. “FINRA’s report provides an initial contribution to our ongoing conversation with market participants about how RegTech tools can help enhance compliance efforts in order to keep markets fair and investors safe.”
FINRA is seeking public comments and feedback on the paper by Nov. 30.
This white paper is part of FINRA’s Innovation Outreach Initiative, which it created last year to facilitate dialogue about financial technology with the securities industry and other stakeholders. The Innovation Outreach Initiative allows FINRA to track fintech developments better to support innovation while maintaining investor protection and market integrity. The effort has resulted in the formation of the Fintech Industry Committee to provide a platform for ongoing dialogue and analysis of fintech developments.