Technological change: Is it different this time?

Lyndon Nelson

Contents

Foreword

Preface

Preface

Introduction: Suptech/regtech defined: Payments, sandboxes and beyond

1.

The uncertain prudential treatment of cryptoassets

2.

US regulatory certainty versus uncertainty for crypto and blockchain

3.

Bermuda: Suptech and regtech supporting the risk-based approach

4.

Suptech: A new era of supervisory philosophy

5.

Cloud computing in the financial sector: A global perspective

6.

DeFi protocol risks: The paradox of cryptofinance

7.

IT transformation in the Prudential Authority of South Africa: A case study

8.

Making the vision a reality: Perspectives from the Monetary Authority of Singapore

9.

Lessons from Hong Kong through the lens of the HKMA

10.

Technological change: Is it different this time?

11.

The ECB’s suptech innovation house: Paving the way for digital transformation of banking supervision

12.

China’s financing opening up and regulatory convergence with the world

13.

Disclosures and market discipline: The promise of regtech

14.

Regtech and new derivatives developments

15.

Fintech and regtech: Leading the evolution and regulation of alternative investments

16.

The role of artificial intelligence and big data in investment management

17.

The promise and challenges of machine learning in finance

18.

Data privacy and alternative data

19.

Digital ID and financial inclusion

20.

Strategic technology: Regulation and innovation of CBDCs

21.

Regulatory sandboxes: Innovation and financial inclusion

22.

Technology and sandbox development innovation in a transitional market: A case study

23.

Developing the regulatory ecosystem: The evolution of stablecoin

24.

Central bank digital currency, regtech and suptech

25.

Digital dollar: Cryptocurrency for everyday commerce

26.

CFTC regtech implications for virtual currency trading

27.

Fintech, regtech, suptech and central bank decision making

Banking has been constantly evolving and is often one of the earliest sectors to embrace new technology. This chapter will look at technological change from the perspective of the regulator – not only the implications of a banking business model in transition, but also in changing how the regulator itself goes about its business. These implications raise the question of whether this wave of change is different this time.

A bank is a highly complex organisation that plays a key role in the intermediation of funds within and between economies. Technological change has been a constant in banking, whether it has impacted the retail side of the business, such as the introduction of pneumatic capsules that allowed bank customers to withdraw and place deposits without getting out of their cars, or in the wholesale side with the first wire transfer of funds in 1870. Each change has brought both opportunity and threat to banks. For regulators technological change has not been so profound, with changes to the office working environment being the most significant – gone are the typing pools and in their place a more mobile workforce. In terms of regulators’ interaction with firms, that

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