Question

Question 1
A.In addition to disruption of Insurance, can you think of any financial technology (Fintech) or technology that disrupt the regulation of finance industry? Please provide at least five examples.
B.What are the goals for setting regulations?
C.‘Regulations can be good or bad to the society’, ‘Too weak or stringent regulations can also be bad to the society.’ Please analyze the statements with reference to the rise of fintech in the society.

Answer 1

Financial technology (Fintech) or technology that disrupt the regulation of finance industry

1. Managing risk with AI/Ml

As organisations are reshaping their business models to take advantage of emerging technologies, the risk-management function is also undergoing a paradigm shift to keep pace with these developments. Advanced technologies like AI/ML and cloud computing have made it possible for organisations to analyse vast amounts of data, both structured and unstructured, to accurately uncover and assess emerging risks and drive optimum pricing strategies. Further, heightened regulatory scrutiny in the FS space and increased costs for compliance breaches are also driving organisations to build sophisticated risk management capabilities to effectively navigate in an increasingly open and connected world.

2. Moving from robotic process automation (RPA) to intelligent automation (IA)

Financial service organisations have successfully implemented many automation initiatives, especially in functions such as finance and operations, but have been unable to realise a true end-to-end automation vision. In ‘Financial services intelligent automation survey’, less than 20% of the respondents said they have achieved an enterprise-wide scale in automation. RPA technologies, while has no doubt helped in delivering value, is severely restricted in its capabilities by design. Consequently, organisations have started moving beyond ‘vanilla’ RPA options and entering into the promising space of IPA over the past year.45 Unlike RPA, IA is not a single tool, but a collection of automation tools such as robotic process automation,workflow automation,process intelligence,intellegent data extraction and conversatinal interface that could be orchestrated together for tackling more complex problems.

3. Blockchain moving into the mainstream

Blockchain is gaining increasing traction across multiple industries, as supported by PwC’s Global Blockchain Survey 2018, with 84% of respondents saying they are actively involved with blockchain technology. In the same survey, respondents cited FS as the most advanced industry in developing blockchain systems

4. Building and innovating on cloud

The adoption of cloud platforms has accelerated in recent years, and has helped increase the scope and pace of innovation. According to International Data Corporation (IDC) estimates, global spending on public cloud services and infrastructure is expected to grow at a CAGR of 23.8% over 2018 to reach USD 210 billion in 2019, and is forecasted to grow at a CAGR of 22.5 % during 2017–22 to reach USD 370 billion in 2022. In addition, the banking industry is forecasted to spend more than USD 20 billion on public cloud services in 2019, which indicates the significant inroads it has made into the industry

5. Instant Digital Payments

The rise of digital commerce, innovation in payments technology using AI, blockchain, the Internet of Things (IoT) and real-time payments; and the introduction of mobile point of sale (POS) devices have led to a reduction in the cost of acceptance infrastructure and also contributed to growth.