Use of Regtech by Central Banks and Its Impact on Financial Inclusion

Gurung, Nora; Perlman, Leon

doi:10.2139/ssrn.3285985

Cited by 6 publications

(8 citation statements)

References 7 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In the latter case, staff would still be needed to monitor the decisions taken. In either case, appropriately qualified personnel are rarely found in developing countries (Gurung and Perlman, 2018). Moreover, some studies suggest that humans and AI technologies, notably machine learning, contribute to different aspects of decision-making.…”

Section: Litterature Backgroundmentioning

confidence: 99%

“…In developing countries, the rapid development of technology and new entrants such as Fintech, introduce new risks that regulators have to consider to maintain financial stability. Examples of these new risks might be related to the lack of appropriate regulations (Gurung and Perlman, 2018). In these countries, regulators must develop new approaches to avoid banks being excluded from the global financial system.…”

Section: Litterature Backgroundmentioning

confidence: 99%

“…However, despite the vital importance of compliance competency and RegTech in banking, not all banks can implement RegTech effectively. This can particularly be the case in developing countries due to a lack of resources and differences in income, industrialization level, and so forth (Gurung and Perlman, 2018). Additionally, in developing countries, banks may not face the same institutional pressures as in developed countries, where mimetic and normative pressures prevail (Burdon and Sorour, 2020).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Institutional pressures and RegTech challenges for banking: The case of money laundering and terrorist financing in Lebanon

DOUAIHY

Rowe²

2023

Journal of Information Technology

View full text Add to dashboard Cite

As banks face heightened levels of regulatory challenges, many of them, especially those in developing countries, are struggling to maintain their reputations. This paper addresses the following questions: How do commercial banks in developing countries like Lebanon respond to institutional pressures for compliance concerning anti-money laundering (AML) and counter-financing of terrorism (CFT)? How do Regulatory Technology (RegTech) solutions contribute to solving their compliance problems in this domain and why may the potential of RegTech be limited in the Lebanese context? To answer these questions, we conducted a field study among Lebanese commercial banks and their vendors. Based on thematic analysis, findings reveal the importance of technology for enhancing compliance of Lebanese banks with international regulations, especially US ones, thereby avoiding sanctions. Thus, the adoption of RegTech is mainly due to coercive pressures, whereas the choice of RegTech solutions is highly dependent on mimetic and normative forces, and happens later. Results also show that manual processes are insufficient for compliance due to the huge number of regulations and transactions. Hence, RegTech for AML/CFT is notably adopted for the efficient screening of clients and monitoring of their transactions. These solutions enhance decision-making processes for compliance teams, which become effective when the banks ensure an adequate interaction between employees and the new technologies. However, RegTech presents several additional challenges that have to be overcome for effective compliance such as finding the right vendors and ensuring data quality. Moreover, the geopolitical context in developing countries like Lebanon limits the potential of RegTech for AML/CFT.

show abstract

Section: Litterature Backgroundmentioning

confidence: 99%

Section: Litterature Backgroundmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Institutional pressures and RegTech challenges for banking: The case of money laundering and terrorist financing in Lebanon

DOUAIHY

Rowe²

2023

Journal of Information Technology

View full text Add to dashboard Cite

show abstract

“…RegTech can monitor data files, emails and voice communications produced by their employees (Micheler & Whaley, 2020) and take care that information sent out into the wider world is complete and accurate, clamping down on it being otherwise used by senior managers to "obfuscate, mislead, distort, or confuse regulators and investors" (Currie et al, 2018, p. 306). Industry associations and investors can share data with regulators to create the basis for integrated technology-driven regulation (Yang & Li, 2018), while non-profit organisations and donors have lent a hand in developing tools and techniques to improve market supervision and policy analysis (Gurung & Perlman, 2018).…”

Section: Dimension #3: Grounding Regtech: Stakeholders and Applicationsmentioning

confidence: 99%

“…Risks of RegTech: Technology, innovation, data and modelling bring undeniable risks onto the agenda. Operational risk, cyber risk, privacy of data "particularly where customer data is shared with a third-party vendor", algorithmic biases, the risk of relying on low quality data and on models being transparent (Deshpande, 2020;Buckley et al, 2020;FINRA, 2018, p. 9;Gurung & Perlman, 2018;Currie et al, 2018), as they may turn into black boxes, are all a challenge to anyone's spirit of innovation.…”

Section: Dimension #4: Benefits and Risksmentioning

confidence: 99%

RegTech in public and private sectors: the nexus between data, technology and regulation

Grassi

Lanfranchi

2022

J. Ind. Bus. Econ.

View full text Add to dashboard Cite

Higher regulatory compliance requirements, fast and continuous changes in regulations and high digital dynamics in the financial markets are powering RegTech (regulatory technology), defined as technology‐enabled innovation applied to the world of regulation, compliance, risk management, reporting and supervision. This work builds on a systematic literature review and a bibliometric analysis of the literature on RegTech, its influential papers and authors, its main areas of research, its past and its future. The resulting multi-dimensional framework bridges across four main dimensions, starting with regulation and technology, where one or more regulations, not necessarily financial ones, are addressed with the support of technologies (e.g. artificial intelligence, DLT, blockchain, smart contracts, API). Data play a central role, as sharing them enables data ecosystems, where additional value can be attained by each market participant, while data automation and machine-readable regulations empower regulators to pull data directly from the banks’ systems and combine these data with data obtained directly from customers or other external sources. Several applications emerge, both for regulated entities, covering matters of compliance, monitoring, risk management, reporting and operations, as well as for authorities, which can leverage on RegTech (SupTech) solutions to make policies, to undertake their authorising, supervising and enforcement operations, for monitoring and controlling purposes, and even to issue fines automatically. As a consequence, stakeholders can reap a series of benefits, such as higher efficiency and effectiveness, accuracy, transparency and lower compliance costs but also risks, such as cyber risk, algorithmic biases, and dehumanization.

show abstract

Rules and Nudging as Code: Is This the Future for Legal Drafting Activities?

Saraiva

2023

Economic Analysis of Law in European Legal Scholarship

View full text Add to dashboard Cite

Use of Regtech by Central Banks and Its Impact on Financial Inclusion

Cited by 6 publications

References 7 publications

Institutional pressures and RegTech challenges for banking: The case of money laundering and terrorist financing in Lebanon

Institutional pressures and RegTech challenges for banking: The case of money laundering and terrorist financing in Lebanon

RegTech in public and private sectors: the nexus between data, technology and regulation

Rules and Nudging as Code: Is This the Future for Legal Drafting Activities?

Contact Info

Product

Resources

About