On May 20th, 2020, the CRTA hosted the third session of our Spring Webinar Series entitled: Instilling Trust Through Sound Data Governances Practices



Moderated by:

• Vivek Bhanot, Vice President, Head of Data Management & Analytics, Paradigm Quest

Featured panelists:

• Laila Paszti, Technology and Privacy Lawyer, Norton Rose Fulbright
• Keith Jansa, Executive Director, CIO Strategy Council
• Ajinkya Kulkarni, Senior Director – AI Strategy, Royal Bank of Canada

With data at the nexus of digital transformation efforts that are taking place across a wide spectrum of public and private sector organizations, a scalable and sustainable approach to data governance is crucial for success. The diverse composition of backgrounds and experiences from our subject matter experts made for a thought-provoking and highly informative conversation from which I’ll highlight two key themes that emerged:

Moderated by: Doron Telem, National Leader, Risk Consulting, KPMG

• Paul Finlay, Machine Learning Lead, Trustworthy AI, Xanadu.ai
• Jessie Lamontagne, Data Science and Model Innovation, Scotiabank
• Steve Sweetman, Principal Program Manager, Ethics and Society, Microsoft

 
Are we ready for the power of AI?  Is it still a tool that’s too complex, too perplexing to give agency to and implement in professional environments? We know it’s already running in the background of our daily lives, collecting and analyzing, predicting and tailoring, but how do we decipher the mystery and realize its potential?
 
We’re now producing a massive amount of data, making it increasingly difficult and unwise to analyze and model using traditional approaches.  We are at a decision point.  The advent of artificial intelligence and machine learning presents us with tools with limitless potential to solve increasingly complex problems.  It also presents us with unique risks.  Understanding these risks is a step towards better utilization.  Recently, 3 drivers in the implementation of AI were discussed at a session presented by the Canadian Regulatory Technology Association.

On May 13, 2020, we hosted the first session of our Spring Webinar Series – Conquering the Complexity – Managing Third-Party Risk
 
Myron Mallia-Dare, a technology and business lawyer from Miller Thomson, led this timely, informative discussion with:

• Ally Karmali, Associate Partner, Practice Lead, Risk and Compliance, IBM
• Justin Muscolino, Head of North America Compliance Training, GRC Solutions (Pty) Ltd.
• Riley Tighe, Product Manager, IT Risk, Resolver Inc.

 
This event will be available for replay on June 2, 2020 at 4pm.  To Register 

Highlights
While artificial intelligence (AI), blockchain and other emerging technologies are bringing new risks and new third parties to the table, both risks and vendors have taken on increased importance due to COVID-19.  Some new risks are temporary, some permanent.  COVID-19 may increase the adoption of third-party solutions but may also bring new scrutiny to them.
 
The new COVID-19 world puts third-party-, enterprise- and business-continuity risk-management programs in the limelight and has exposed holes in programs that might not otherwise have been identified.  Firms are at different levels of maturity when it comes to these programs.  Those at the forefront are already re-evaluating and making plans to reset; they are going back to basics to ensure that the very foundation of their programs is strong, reflecting on what is a critical vendor, levels of risk, and so on.  They are working to identify and address future risks that may arise from COVID-19 and what we have learned from it.

One of the positive outcomes emerging from the COVID-19 pandemic is the dramatic improvement in air quality the world has observed from reduced fuel emissions and air- and water pollution.  Within weeks of India imposing its nationwide curfew, the Himalayan Mountains could be seen clearly from as far as 200 km away for the first time in 30 years; satellite images show a dramatic change in the clarity of the Venice lagoons, with fish once again visible in the canals.   And the reduction in harmful gases (carbon dioxide and carbon monoxide) in dense urban centres like Manhattan, Seoul and Wuhan are projected to have positive health benefits (potentially resulting in fewer premature deaths) for those most vulnerable to respiratory illness. 

While these are all encouraging signs, experts are quick to warn that behavioural changes from the global lockdown are not a long-term solution to the impact of climate change on our environment.  Many expect these benefits will disappear quickly once the economy re-opens, which calls into question whether this is a pivotal point for the world to consider how re-entry should be designed.  To continue the momentum that this unprecedented crisis has kick-started (the ‘silver-lining’ as it were) scientists, government and business are calling for a thoughtful approach to re-entry that takes a longer-term view of climate change.  This was also the view expressed by Bill Gates last month in his observation about how encouraged he is at the thought of “innovation and science and the world working together” to address climate change.  

At this pivotal juncture, corporations should consider what role they wish to play to support these measures.  While changes in public behaviour may continue to have positive influences as the world adjusts to our new “normal” until such time as a vaccine is developed (e.g. continued reduction in harmful air pollutants from less road and air travel), the opportunity to leverage the world’s consciousness about climate change has never been greater.    For corporations searching for the next strategic opportunity for investors, channeling both intellectual and financial capital towards initiatives with the potential to influence change could be the salve the world needs right now – the hope for our future and for that of generations to come.  Investing in technology to better support carbon capture, renewable power generation, new agriculture strategies and cleaner modes of transportation are opportunities that have never been put in the spotlight as clearly as they have as a result of COVID-19. 
​
If there is an opportunity to be gained from this global crisis, it is one where collaboration amongst government, scientists and investors could reap great benefits for climate change through greater enablement of clean technology solutions.   

Written by Sylvia McGratten
Strategic Advisor, Canadian Regulatory Technology Association 

 

With the first quarter of 2020 coming to a close, there is a growing and almost universal sentiment that we would all like a redo on the year. As they say, hindsight is 20-20 (no pun intended) but it would have been nice to have had better foresight into how best to deal with the operational issues and risks that firms are facing right now.

Many, if not all, financial institutions (FIs) have enacted a variety of measures to minimize the spread of the COVID-19 virus and the Canadian FIs are all working diligently and in concert with other global banks to formulate and implement strategies to mitigate the spread of COVID-19, while still maintaining sales and trading activity and all associated operational procedures.

​So what exactly are firms doing? 

In partnership with Fintech Cadence, we surveyed the Canadian RegTech community between January 15 February 28, 2020 to understand the key regulatory compliance challenges firms are facing. Respondents were asked to select their top three issues from a range of options, including topical themes such as open banking, digital ID and third-party risk along with more ‘legacy’ themes, such as regulatory reporting and regulatory change management. Surprisingly, the top three challenges were exactly the same as last year. Compliance Effectiveness ranked as the greatest challenge, followed by Regulatory Change Management and Trade Reporting. It would be interesting to delve further into the underlying issues. Does it stem from underlying technology structure and an over-reliance on manual processes? Or is it due to the movement by banks and other financial institutions towards digital transformation that requires a re-think of compliance and risk functions in order to provide a seamless and trusted customer experience? I expect a bit of both. (You can hear from RegTech experts on this topic when the CRTA leads a panel on this subject at FCCON20 Rise
​ 

The Canadian Regulatory landscape is multi-layered and quite complex making it difficult for RegTech firms to make sure they are building products that are compliant and sustainable. The CRTA have put together a reference paper to help firms understand what each regulatory body does and provide some insight and links to  their 2020 strategic plans. 

On January 16, 2020 we held our first sold-out event – Exploring the Art of the Possible – Trade Surveillance for Capital Markets.  Many thanks to Deloitte Canada for graciously hosting and to Quantexa for their sponsorship. With the room filled to capacity, the morning started with a thought-provoking discussion, moderated by Sandra Persaud of Deloitte, among financial industry practitioners:

• Jason Le – AVP Compliance, Head of Global Surveillance – TD Wholesale Banking
• Loren Schwartz – Head of Regulatory Reporting Services – CIBC World Markets
• Alex Taylor – VP Surveillance – IIROC
• Elizabeth Bethoney – Head of Financial Markets, Americas – Quantexa

Loren Schwartz and Jason Le started by describing how their respective organizations are tackling trade surveillance.  Using open-source technology is key to remaining agile.  As Loren said, “the last thing we want to do is build another legacy system”.  Realistically though, budget constraints can limit a firm’s ability to implement best-of-breed systems.
​
They also discussed the merits of in-house development: the ability to experiment, flexibility to adjust course as lessons are learned and rules change, and ultimately building “muscle” within the firm.  As with almost every technology project, the challenge – especially for large organizations – is normalizing all the disparate data needed to be effective.  As Jeff Harvie later pointed out, “you can’t do any of the fun stuff until you organize the data.”

In 2019 RegTech evolved from being an experiment to a reality. FIs realized that RegTech is a tool that fits into a well-defined, broader compliance framework and can help reduce compliance risks when coupled with the right data, people and processes. We also saw global regulators go on the record about RegTech and start to ask FIs questions about how they are leveraging RegTech and exploring SupTech* to manage their own processes.  Investment in RegTech grew by 103% and it has matured to its own vertical.  At the CRTA, we believe that RegTech will continue to transform Canada’s financial services ecosystem and will evolve into a necessary utility. We plan to continue to lead the conversation, drive strategic thinking and mobilize action. Here’s what some of our Board and Advisors predict for 2020:  
CRTA 2020 Predictions