The FCA would utilize “supervised machine-learning from these analytics,” Cook said, and “unsupervised AI” to detect financial irregularities.
He added: “We’re looking at these underlying technology approaches and regtech solutions to try and see how we can employ them internally to be more efficient and to better identify which solution (works) for the financial markets.”
FCA working with regtech innovators and global regulators
Cook said that the U.K. regulator was working with global regulators as well as regtech companies to showcase its work and to learn from others around the world.
He said: “A lot of our fintech over the last year has been looking into regtech’s application for ourselves as well, and encouraging and bringing other international regulators to the table. We take a very active role in trying to expand the regtech discussion globally. Equally though, we seek to learn what’s going on elsewhere.”
A report published last October by the University of Hong Kong identified the regtech industry as a field capable of addressing risk in “real time” and increasing the efficiency of compliance.
“Regtech to date has been focused on the digitization of manual reporting and compliance processes, for example in the context of know-your-customer requirements,” it said.
“This offers tremendous cost savings to the financial services industry and regulators. However, the potential of regtech is far greater – it has the potential to enable a close to real time and proportionate regulatory regime that identifies and addresses risk while also facilitating far more efficient regulatory compliance.”
