UK financial firms, regulators and governments would benefit from increased efficiencies and cost savings if the developed shared digital platforms to more effectively tackle things such as customer background checks, regulatory reporting and fraud prevention, says a new report from Deloitte and TheCityUK.
The report argues that by 2025, digitalisation and the associated increase in online data, growing threat of cybercrime, and rising customer demands, will require FS firms and regulators to substantially up their resourcing and capabilities.
To help deal with this, the authors suggest that stakeholders take a collaborative approach, splitting the bill through the creation of shared platforms. This would not only cut costs, but also improve customer experience, bring standardisation and possibly be a UK export success story.
The report identifies seven possible platforms - for transaction monitoring, collateral management, fraud, KYC, regulatory reporting, syndicated loans processing, and trade finance - before ultimately settling on KYC and regulatory reporting as the two that are most worth further investigation.
Notes the report, a shared platform approach for regulatory requirements, based on a distributed or shared ledger, is already being piloted and offers benefits such as improved, more granular data security, and the ability for firms to submit data on an ongoing basis, rather than waiting for periodic submissions.
Louise Brett, head, fintech, partner, Deloitte, says: "New digital platforms with regulatory backing have the potential to bring significant strategic benefits to both incumbents and our leading FinTech industry, greater transparency and better customer outcomes."
Miles Celic, COE, TheCityUK, adds: "The UK already has an established reputation as a global leader in FinTech, and it’s clear that these platforms are key to the UK maintaining its lead on the regulatory front and would provide a key export of UK FinTech expertise. By developing new shared digital platforms, the industry could reduce costs, increase regulatory efficiency, and improve customer experience."
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