Commonwealth Bank of Australia (CBA) and ING have conducted a RegTech pilot aimed at simplifying processing of information and implementation of regulation.
The Financial Conduct Authority (FCA) participated as the observer in this pilot project which used the Markets in Financial Instruments Directive II (MiFID II) as a test case.
CBA and ING partnered with fintech Ascent Technologies and law firm Pinsent Masons for this project.
Natural Language Processing (NLP) and Artificial Intelligence (AI) were deployed to interpret and convert 1.5 million paragraphs of regulation into a series of bitesize, actionable tasks suitable for banks.
Ascent’s technology helped the banks to identify the items in the regulation swiftly that can be reviewed and auctioned thereby eliminating the need of manual processing.
The successful completion of the project is also expected to provide FCA greater understanding on how RegTech, NLP and AI can help the organisations to simplify their compliance obligations.
ING UK Enterprise Office director Ian Hollowbread said: “This pilot has brought into focus a number of barriers to RegTech adoption, but also see its massive potential.
“Only by uniting the industry, RegTech and regulators, can we begin to bridge the gap between technological potential and the cost of becoming regulatory compliant.”
CBA London Innovation Lab head Supun King-Jayawardana said: “This pilot provides all participants the opportunity to test some of the latest applications against complex industry regulation.
“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.”