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Keeping up with regulatory changes can be a challenge within any industry, and the post-2008 financial sector is no exception. Global regulatory responses to the financial crisis triggered an onslaught of new rules and laws meant to curb the potential for fraud and abuse in financial services markets. This deluge of new regulation has overwhelmed compliance departments at some global financial institutions. However, companies that are embracing new developments in regulatory technology (RegTech) are developing systems capable of maintaining […]
If you’ve been following the financial services sector for some time, you’ll know the bad reputation that has dogged compliance: a supposed cost-leeching, innovation-inhibiting corporate straitjacket.
The number of regulations has increased in recent years, which has only added to the cost of abiding by them.
No one can claim this is without good reason because these changes ultimately protect end customers. They nurture transparency and trust in the market, a necessity in the wake of the financial crisis. But the […]
*On April 18th, 2019, the FCA issued a letter addressed to the CEOs of wholesale market broking firms. The following is fictional: it is how we believe a broker using Shield would have responded:
Dear Simon Walls, Head of Wholesale Markets Department, Financial Conduct Authority
I received your letter reflecting the FCA’s view that firms have not kept pace with regulatory reform and therefore warning them to take significant action in order to avoid potential penalties for noncompliance. I am writing […]
[Podcast] The RegTech Report with Shiran Weitzman: Automated compliance within RegTech. What’s the reality?shieldadmin
Shiran comes on as a guest for RegTech startup Alyne’s podcast.
In this episode, hosted by Karl Viertel and Stefan Sulistyo, Shiran discusses the future of compliance and can Autonomous Compliance actually become a reality or will it stay as just a buzzword.
Listen to the episode on one of the links:
The European Union’s Markets in Financial Instruments Directive (MiFID II) represents a major leap forward towards improving the integrity of financial markets on the continent. It requires greater scrutiny of possible conflicts of interest and extensive reporting of transaction-related information, among other things, that have forced many financial institutions to scramble to come into compliance.
But now that the regulation is entering its second anniversary, policy experts are starting to wonder whether the MiFID II is the post-2008 financial reform […]
Senior compliance officers are adapting to evolving legal environments. This is obvious even from the outside; the Great Recession triggered financial reforms across Europe and North America aimed at preventing the potential recurrence of such an economic calamity. What may be less obvious, however, is the fact that these legal changes are requiring compliance officers to rely on increasingly advanced technology for regulatory processes.
Senior Compliance Officers Demand Cutting Edge Technological solutions
Just as our societies and economies have evolved to […]
Earlier this year, financial regulators at the New York Department of Financial Services assessed a $40 million fine against Standard Chartered Bank based on trading improprieties that took place between 2007 and 2013. The state regulators uncovered an extensive scheme among the bank’s forex traders that included price manipulation, collusion, and the unauthorized disclosure of privileged client information.
The Standard Chartered fine caught many in the industry by surprise, and it appears that the story is just getting started. In […]
A summary of the new rules for Non-Swiss financial service providers and their client advisors that provide cross-border financial services into Switzerland or creators of financial instruments for the Swiss market
The new rules in a nutshell and how they apply to Non-Swiss financial service providers or creators of financial instruments
The provision of cross-border financial services by Non-Swiss financial service providers to Swiss clients, as well as the creation of financial instruments for the Swiss market, will be regulated comprehensively […]
In my previous post, I’ve set the groundwork by outlining the challenges faced by the banking industry today, especially in regard to the increasing demands of digitization. In this second post we’ll examine some specific strategies that incumbent banks could consider in order to meet these challenges. Of course, that list is not completed.
There are various reasons for change: from processing, technology, supply and distribution channels to positioning, data management, compliance, risk management, customer engagement and the wish for […]
The financial services industry is currently facing a perfect storm of disruption and upheaval, and the challenges that lie ahead will require an unprecedented level of agility and adaptability. To survive and succeed, organizations must be ready to anticipate, prepare for and pre-empt this disruption.
In this, the first of two posts, I’ll uncover the specific challenges faced by incumbent banks. We’ll also take a look at the business life cycle of an established bank and see why banks need […]
Over the last 12 months, there’s one word that’s been increasingly on the lips of all financial services firms; culture.
So is it now high time that RegTech firms wake up to the importance of culture and the opportunity that this presents? In this blog post, Michael Fotis the Founder of Smart Money People, a financial services review website and research company explores culture in finance further.
So, what is culture?
Culture is widely viewed as the typical behaviours that characterise a […]
Financial markets are becoming more technology-driven. As a result, savvy traders with less-than-scrupulous intentions can use an increasingly prolific stream of e-Communication methods to evade traditional compliance monitoring. The EU Market Abuse Regulation (MAR) and other regulatory directives are aimed at detecting, punishing, and deterring just this type of wrongful behavior. Financial institutions across the continent have implemented surveillance platforms designed to capture an increasingly broad range of financial transactions, electronic communications, and trade-related data in order to comply […]
Over the past 18 months, we have seen a flurry of new regulations coming into enforcement. Arguably the most popular amongst those, are Open Banking and the EU General Data Protection Regulation (GDPR) – an interesting mix when you look at the requirements. For example, both Open Banking and GDPR were aimed at giving power back to the consumer BUT one cannot overlook the paradoxes, and in there lies the complexity.
Broadly speaking, Open Banking is the use of open […]
Shiran talks to Lou Carlozo, Managing Editor at BAI, on the process of moving from compliance complexity to a RegTech reality.
You can listen to the episode on your favorite platform:
On the BAI website
Let us know what you think about the episode on Twitter @Shield_F_C
Or connect with Shiran
The people working in financial services are now facing new challenges to the privacy of their personal data. Regulations passed to improve transparency in financial markets require firms to capture, record, and analyze all electronic communication data.
Although financial markets must be transparent to ensure fairness, the protection of private employee data has never been a more significant issue for financial service providers. These firms are having to balance the extensive disclosure requirements of an increasingly data-driven compliance environment, and […]
While Crypto is not part of our business, we like our blog to feature all representatives of our eco-system. That is why I (Iftach Drori) approached Thomas Power to get his view on the current state of Crypto and get his thoughts on regulating the field and the adoption struggles it is currently facing.
Here is our short talk:
Q: Cryptocurrencies are still seen as the preserve of those who truly understand them – do you believe there will come a […]
On episode 32 of the Fintech Newscast, Shiran talks to John and Monica on the rise of RegTech, today’s regulations and challenges that capital markets face today.
Listen on your favorite app/ platform
On the FinTech NewsCast website
To assess GDPR’s compatibility with Blockchain (or Ephemeral Blockchain in this case) it is important to define each of them first and then look at where the two overlap or intertwine.
GDPR is a shortened form of the General Data Protection Regulation initiated on 25th May 2018 to be implemented throughout the member states of the European Union (EU) in Europe. It was designed for companies or entities who deal and manage personal information to be transparent about:
What particular personal data […]
Shiran had the chance to be a guest on Jason Pereira’s great podcast Fintech Impact.
The two discusses integrating communication into a next-generation compliance platform, how the Shield platform interacts with APIs, how Machine learning can be incorporated to tag financial compliance issue and much more
Check it out in one of the links here:
The Fintech Impact Podcast website
Let us know what you think on Twitter @Shield_F_C
Enterprise software applications have proven effective at flagging possible noncompliance events. But once a particular exchange is flagged, compliance managers are largely the ones responsible for following through with the necessary investigation.
In order to ensure these investigations are carried out properly, compliance officers must have a complete record of all relevant facts to consider. This requires a review of both the event in question and all of the pertinent information surrounding it. In today’s data-driven financial markets, compliance officers […]
Many firms still struggle with the implementation of the GDPR and the increasing number of fines is a testament to that. And those that seem to have dodged the bullet so far, the next one seems on its way. The ePrivacy Regulation promises to bring more challenges to the financial services industry that is still struggling with the first wave of new data protection regulations. Jochen Heussner of PlanetCompliance explains what we can expect and what it means for […]
I’ve been a part of the Shield team for a year now, and the thing that always amazes me, is the fact that no matter how big or small, how tech oriented or not, whether it’s an EU bank or a US one, most compliance officers face the exact same problems and struggles in their day-to-day.
In essence, they spend too much time on simple, mundane activities, mostly alert saturation.
A day in the life of a compliance officer
I would like […]
We’ve witnessed, via some very high-profile misconduct cases, the real challenges some financial services firms are facing in supplying information to support investigations. A case in point is the recently completed Australian Banking Royal Commission (RC).
Reporting from the RC included some rather startling revelations. And, the implications of some of the findings are just as relevant to global financial services firms, as to those named in the RC’s reports.
The RC initially requested from the 60+ Australian financial services […]
When we created the shield blog, we wanted a place that provides a platform for various key members in our eco-system to speak their mind. A blog that not only discusses RegTech, although our core business is there, but covers other topics that you, our readers, will enjoy.
That’s why I (Iftach, Head of Marketing) was very keen on hosting Simon Cocking, Chief editor of Irish Tech News and InvestInIT, on our blog.
I wanted to get Simon’s view on the […]
This article deals with Crypto players as payment service providers and their potential impact on the Know Your Customer (KYC) industry.
KYC services are about client onboarding decisions based on risk flags, client identity data, and structure. The right understanding of counterparty risk results in risk-based evaluation cycles.
Will payment processing providers in the financial industry and the Crypto industry deal with similar challenges?
The potential impact of new players is determined by legal frameworks and legal interpretation.
Introduction to European framework:
The European […]
Earlier this month, the New York Department of Financial Services (DFS) assessed a $40 million fine against Standard Chartered. The DFS hit the financial firm with the multi-million-dollar penalty after discovering that its traders had attempted to rig transactions in foreign exchange markets. While the amount of the fine was appropriate given the degree of collusion and fraud involved, the timing of the enforcement action took the financial industry by surprise. This is because all of the illegal activities […]
Previous blogs from Shield have addressed how important it is in the age of data regulations to take demonstrable control over enterprise data. New requirements are still emerging, so those who thought that MiFID II, GDPR and PECR were items to be checked off a list and then forgotten about are misguided.
With the impending arrival of new and more stringent rules around Electronic Communications in the shape of the Privacy in Electronic Communications Regulation (PECR, or ‘ePrivacy’), let’s take […]
Whereas cryptocurrency may have created the environment under which Blockchain technology was introduced, by no means are these two technologies codependent. Rather, Blockchain is a byproduct of people’s inherent interest in streamlining transactions and not strictly limited to cryptocurrency. And while the Blockchain is shifting the transactional landscape, it’s also poised to disrupt the financial services industry.
Blockchain – More Than Just Bitcoin
As soon as data is saved into a Blockchain, it can’t be changed or deleted except as allowed […]
Anti-fraud, anti-money laundering and other financial regulations require financial services companies to track electronic communications in various forms. However, this often requires these firms to collect substantial volumes of different types of communications data. Standard lexicon-based search software commonly used in financial services is effective up to a certain level of scale and complexity, but the demands of today’s financial regulators are outpacing traditional enterprise software solutions.
Legacy software solutions come up short
Data management has become a critical component of […]
Deriving value from electronic communications data
In this report, we explore the value that can be realized through the integration of electronic communications (eComms) data into the wider trading ecosystem.
By moving from tactical compliance to strategic investment, firms can not only satisfy the regulators but also boost the analytical capabilities of the front office; delivering better execution, greater trading signal analysis, and more efficient business intelligence.
Simon Hornibrook of Nomura; Paul Burleton of Lysis Financial; Paul North at BNY Mellon; Rachel […]
Over the last couple of years, the crowdfunding market started to build rapidly. ICO or Initial Coin Offering is not only a very advantageous way of raising capital for additional project’s progression but also a remarkably profitable investment tool.
But there are many troubles on this market, which need an answer.
According to data from DeadCoins and Coinopsy, around 1000 cryptocurrency-related projects floundered in 2018 and are now dead. Although this may seem like bathing, the reverse couldn’t be truer.
Dishonest and Poor Crypto Projects
The hyperbolic bull run […]
Regulators in the European Union have developed extensive rules requiring financial firms to monitor and manage transaction-related communications. But the digital age has changed the way people communicate. As a result, complying with the EU’s increasingly complex data monitoring and management rules often requires financial firms to monitor voice, video, in-person, and text communications. The technical challenges associated with managing this data aside, performing such extensive monitoring of customer and transaction-related data raises meaningful concerns regarding personal and financial […]
During 2018 I was fortunate enough to have been working with financial institutes from all across the globe, and it would be “old news” if I said that RegTech solutions are in higher and higher demand. Regulatory constraints, on the one hand, client expectation for frictionless experiences on the other, and tangible, ever-growing cybersecurity threats that target financial institutes primarily (for a variety of reasons), together make a powerful combination that cannot be ignored.
Obviously, different institutions have different needs, […]
Modern financial regulations require firms to monitor, track and report data on innumerable transactions, customers, and business activities. The potential burdens of these requirements are massive, and many financial institutions are still working out how to achieve full compliance without disrupting operational efficiency.
This is particularly true given the fact that many banks and financial firms place the responsibility for monitoring email communications, calls, transactions, e-commerce activities, and trade data, squarely within the scope of the IT department. More often […]
Businesses in regulated industries expend vast amounts of time and company resources on ensuring company-wide compliance. Regulated companies invested over $1.3 million in compliance technology on average during last year alone, and the cost of compliance is only continuing to increase. Much of this is due to the increasingly complex regulations that agencies are enacting to combat sophisticated cybercrimes. However, fortunately for today’s financial services company, enterprises are developing software solutions designed to increase efficiency in this complex field.
Bad actors in financial institutions are nothing new, banks have been accruing fines for poor conduct that run to the billions of dollars. Regulators are working hard to bring in new legislation to curb such behaviour and it is getting personal.
In March 2017 former investment banker, Christopher Niehaus was fined £37,198 by the Financial Conduct Authority (FCA) for using WhatsApp to share confidential client information. That was before the weighty MiFID II directive came into force at the beginning […]
Data can be an excellent resource for firms that are concerned with operational performance and consumer engagement. After all, this type of information provides critical feedback about how companies engage with their customers and employees. Yet like most other resources, data must be managed effectively in order to make sure it delivers its maximum value.
Today’s financial companies track millions of pieces of trade-related data. This information is often highly relevant to the customer experience, and it may provide insight […]
In early November myself and the team took part in the ‘Capture, Correlate, Analyse: Deriving value from electronic communications data’ event, which was held at Thompson Reuters in the heart of London’s trading center, Canary Wharf.
The theme we presented is that that well-integrated technology is the key to not only maintaining strict compliance but also for deriving better insights from eComms and realizing greater ROI – a view which undoubtedly rang true with my fellow speakers and the audience […]
Well ok, maybe not 76.
MiFID II (article 76) is approaching its one-year anniversary, and many companies are just now starting to understand its ongoing impacts on the way financial firms do business in Europe. Implementation of the new directive has ramped up over time, and Europe’s Financial Conduct Authority (FCA) has recently announced that it is ready to levy penalties against non-compliant firms. And, with industry research suggesting that 40% of firms remain out of compliance with MiFID II […]
Today’s managers in regulated industries always have to stay one step ahead. They know about upcoming regulations before they become mandatory and prepare their teams for the operational changes necessary for compliance. But while a particular company may have an effective corporate compliance policy, individual managers in the finance and insurance industries may find themselves caught off guard by specific requirements of new agency rules that apply to them directly. This is particularly true in the United Kingdom under […]
Industry 4.0 (including Artificial Intelligence, or “AI”) started to replace a certain type and number of human employees. Algorithms are superior for repetitive tasks, where decisions are based on a high amount of data. Thus, AI can be particularly helpful for the complex, data-driven tasks of the typical compliance officer. This definition is also applicable for finance-advisors.
Machine learning and human error
Based on the company’s own statement, the algorithm of the fintech robo-advisor EquoBot (using IBM’s super-computer Watson) is capable […]
Between complying with complex regulations, managing diverse teams, and running day-to-day operations, managers in the banking and insurance industries are held to high standards of performance and accountability. These standards are created and enforced at both the company-level and among national regulatory agencies. However, while private management practices are primarily aimed at improving effectiveness and efficiency, legal regulations addressing financial managers tend to focus on overall economic stability and consumer protection.
The Senior Managers Regime (SMR) is an increasingly important […]
On Thursday 4th October, CEO, Shiran Weitzman was in London to showcase Shield FC’s Financial Compliance Hub at the A-Team Group’s RegTech Summit 2018. The message that compliance requires a tactical, strategic and proactive approach clearly resonated with the audience of more than 100 senior representatives from major financial institutions, involved in regulatory change management, regulatory reporting, compliance, and investigations.
Shiran addressed current and future challenges surrounding proactive compliance including issues of measurement, control and oversight, end-to-end visibility of the […]
Since the launch of the UK Financial Conduct Authority’s regulatory sandbox in 2016, several other global regulators have followed suit in a bid to address some of the key issues around regulatory technology. And with the influx of new regulations continuing unabated, the need for innovative solutions to the challenges facing financial institutions has also never been more pressing. Yet while this need is widely recognised by not just the rising ‘RegTech’ sector but also by regulators and the […]
By Shiran Weitzman, CEO, Shield Financial Compliance
Building a data management blueprint
Compliance teams who are able to bring the upcoming General Data Protection Regulation (GDPR) together with the revised Markets in Financial Instruments Directive (MiFID II) will provide a sturdy yet flexible framework for data management within their firm.
MiFID II’s reporting requirements are notorious, for the breadth and depth of data they require firms to collect. The scale of the problem is characterised by the range of data types that […]
By Shiran Weitzman, CEO, Shield Financial Compliance
MiFID II may have come a little too quickly for some companies. Its scope, the slow pace of its formulation and the myriad interpretations of its applications and implications meant much of the EU’s financial services industry had to rush through changes to comply with it.
Many firms struggled to meet the January 3 deadline despite hundreds of City workers spending the Christmas break – their holiday leave cancelled – rushing to put processes […]