“BVI has a fantastic opportunity to set up a digital infrastructure to be able to service the world”, says Professor Philip Treleaven at the recent BVI Finance webinar titled: “Future Data Driven Financial Markets: BVI’s opportunity for a fully digital infrastructure integrating finance and regulation”.
Professor Treleaven, one of the webinar’s presenters, is Director of the UK Centre for Financial Computing and Professor of Computing at University College London (UCL). He is credited with coining the term RegTech. Professor Treleaven was joined by Sally Sfeir-Tait, CEO of RegulAItion, and honorary research professor at UCL. Sfeir-Tait coordinates UCL’s RegTech collaborations and projects on behalf of Professor Treleaven’s research group. The presenters’ presentation focused on emerging technologies for financial services, the impending ‘Data Tsunami’ and the resulting challenges and opportunities, along with the RegNet Project.
Prof. Treleaven said that BVI, like the UK and Singapore are “trying to move towards a completely integrated data infrastructure”.
“The idea that everything from company registrations, audit, legal systems, tax returns, regulations - all integrate together in one government system.”
The 21st July presentation covered three main ‘game-changing’ technologies including Data Technologies like Big Data, Internet of Things, and ChatBots; Analytics Technologies like Artificial Intelligence and Federated Learning; and Infrastructure Technologies like Digital Object Identifiers, Computer-executable rules and Blockchain.
The professor emphasised how these technologies are changing the world and noted that “whether you’re a university or a country or a bank, you can’t just keep doing what you’re doing for the past few years”.
Prof. Treleaven also referenced countries like Estonia, who have managed to almost completely automate government, along with Dubai and Singapore who are heavily investing in their digital infrastructure, adding, “It becomes absolutely compelling for BVI to set up an online digital infrastructure” while noting some retailers whose lack of an online presence caused their businesses to fail.
Federated Learning was a large part of the discussion, which Prof. Treleaven explained is a privacy preserving data technology which allows different companies to collaborate without seeing each other’s raw highly valuable data.
The RegNet platform, an example of the federated learning approach, is a privacy-preserving platform/infrastructure for data and analytics collaboration. This InnovateUK funded project is being used as a model to demonstrate how companies can utilise federated learning to propel the growth of the industry.
The Digital Infrastructure and the impending ‘Data Tsunami’
Challenges to the ‘Data Tsunami’ include the automated digital financial marketplaces; huge volumes of financial data and regulatory data; regulation automation; and FinTech. Some opportunities are an integrated financial services infrastructure; data-driven supervision technology; ‘computable’ (computer-executable) regulation handbook along with blockchain infrastructures for privacy-preserving data access. It was noted that with computable regulation, a regulatory handbook will allow for automation of actions like regulatory reporting.
Regarding the effects of establishing a digital infrastructure on human resources, Sfeir-Tait noted that it won’t replace human beings, but it will create “better tools to do a better job” so that people can focus on adding value.
“The idea is not to replace humans, but to automate the processes that humans go through to then deliver a better solution.”
She also gave the scenario of a present-day regulator who can benefit from automating processes where they may be short staffed and having to look closer and even more risks.
EU-US Data Shield and the ECJ Decision
The 16th July decision by the ECJ invalidated the EU-US privacy shield which means that EU data can no longer be shared with the US. Sfeir-Tait spoke about RegNet as a possible solution. Presently there are several companies working together to develop an infrastructure/ data access platform that keeps data in the jurisdiction and allows an algorithm to be sent to the platform.
BVI’s FinTech Opportunity
The Q&A generated some discussion on BVI’s potential to build a digital infrastructure and attract FinTech. Prof. Treleaven commented that in order to attract FinTech, you have to grow the ecosystem: the infrastructure, data and education.
After the presentation, the moderator of the webinar Elise Donovan, Chief Executive Officer at BVI Finance commented, “I am excited to see the great opportunity for a nimble jurisdiction like BVI to become the ‘Amazon’ of financial services.”