CBA’s “go slow to go fast” approach to regtech

  • By Christine St Anne

A cohesive approach to regtech is key, otherwise the strategy around regulation and technology will simply result in multiple vendor relationships.

This is the assessment of CBA executive manager of Innovation Labs Supun King-Jayawardan

CBA took at the award for Regulated Entity of the Year at the RegTech Association’s annual conference on Thursday.

CBA was recognised as a leader in “adopting regtech with impact”,

The bank has a sizeable team that focuses on regtech innovation – including a “leaner team” based in the UK.

However, the team ensures that it adopts a more measured approach to managing regtech innovation.  

“As a sector it is important that we ensure that we go slow to go fast. What I mean by this is that its not a great outcome for the industry if we just run experiments for the sake of running experiments and end up having vendor relationships with a multitude of different regtechs,” King-Jayawardan.

“A cohesive approach will ensure regtechs work and interact better with our existing systems and processes.

For King-Jayawardan, the bank’s priority at the moment is on developing an end-to-end compliance model.

By this, he means a compliance model that can effectively respond to regulation where any changes automatically flow back through the bank’s existing policies and processes that it controls.

He describes it as “kind of back-end reporting” that can efficiently track and address any regulatory change.

While regtech comes under the bank’s innovation remit, buy-in from the risk and compliance professionals is key – an approach also adopted by Westpac which includes an advisory board made up or risk and compliance professions.

“We adopt a similar structure. We have a risk innovation working group which includes members from the various components of risk management.

“The reality is that we need to strike a balance between ensuring that we don’t lose sight of existing projects and initiatives in the area of risk management. We are getting growing support from respective stakeholders which is also key. We don’t want to start a project with the proper sponsorship,” he said.

For King-Jayawardan, “adopting regtech with impact” is about partnerships and collaboration, a point he highlighted when accepting the award.

He said that collaboration will also allow banks to be better positioned to meet the ongoing regulatory challenges,

The bank has worked with businesses including ING, Ascent Technologies and the Financial Conduct Authority.

During his time in London, he helped drive an alliance with ING UK – the collaboration underpinned the regtech pilot program with Ascent. This alliance also included the Financial Conduct Authority. King-Jayawardana is careful to emphasise that the role of the FCA was simply as an observer.

“Observing the project gave the FCA greater understanding about how technologies driven by regtech such as natural processing language and AI can help financial institutions better meet their compliance obligations,” he said.

“When regtech meets financial services, we create opportunities for banks, start-ups and regulators to collaborate and solve industry-wide challenges. By working together, we can share best practice in due diligence, experimentation costs, business knowledge and resources – ultimately driving great outcomes for all parties.”