Name: Basel III update and regtech developments from RiskMinds HQ
Uploaded: 2024-08-15T15:20:26.325Z
Duration: 479.92

Shearin Cao_V3_1.mp4

Shearin Cao_V3.vtt

English

{{00:00:00}}
Shearin,

{{00:00:08}}
thank you very much for joining
me today at RiRiskMindsQ.

{{00:00:12}}
I just wanted to talk to you
today about the Basel reform.

{{00:00:16}}
It's on everybody's mind.

{{00:00:18}}
Tell us what can we expect
by the end of the year?

{{00:00:21}}
Lovely  to come here.

{{00:00:23}}
Thanks for having me, Lili.

{{00:00:26}}
The Basel reform is on everybody's
mind this year, because I think this

{{00:00:29}}
time last year, we were hoping to get
a bit closer to the finishing line.

{{00:00:32}}
I would say that we're
definitely getting closer.

{{00:00:35}}
We are expecting the consolidated UK
rule set shortly, hopefully, in a matter

{{00:00:42}}
of, months ish weeks, which means that
essentially along with Europe, both

{{00:00:48}}
UK and Europe would have essentially a
consolidated rule set by end of this year,

{{00:00:53}}
although the slight nuance there is the
European banking authorities do work in

{{00:00:58}}
through various level two, legislations
and regulations, so as we speak.

{{00:01:02}}
And as an industry, we're supporting
them on this journey, hopefully,

{{00:01:06}}
to help them get it closer to the
finishing line by end of this year.

{{00:01:10}}
the go vife timeline is
obviously in everybody's mind.

{{00:01:13}}
Europe literally just announced
the delegated act for FRTB, which

{{00:01:19}}
means the market risk component
will be delayed by about a year to

{{00:01:25}}
1 Gen 2026, although the rest of the
package will go live in 1 Gen 2025.

{{00:01:30}}
And I think UK hasn't committed
any adjustment to the timeline.

{{00:01:34}}
So currently the UK timeline remains
to be 1 July 2025, and we'll see

{{00:01:40}}
what the Bank of England says as of
when the rules are being published.

{{00:01:44}}
no doubt, the US timeline remains
one of the biggest variables and

{{00:01:49}}
also questions in everybody's mind.

{{00:01:52}}
Hopefully, later this year, we'll be
expecting the revised proposal on the U.

{{00:01:56}}
S.

{{00:01:56}}
side, also called the U.

{{00:01:57}}
S.

{{00:01:57}}
Basel III Endgame.

{{00:02:00}}
And, hopefully again by end of this
year, we'll have three different

{{00:02:03}}
set of rules, namely the U.

{{00:02:05}}
K., Europe, and U.

{{00:02:06}}
S.

{{00:02:06}}
to compare and contrast.

{{00:02:08}}
And hopefully we'll, be able to
get together, at RiskMinds and I

{{00:02:12}}
think talk about the differences
and nuances, I think, across all

{{00:02:18}}
three jurisdictions, in that sense.

{{00:02:20}}
But, definitely, as I said,
beginning of this question.

{{00:02:23}}
We are getting closer
to the finishing line.

{{00:02:25}}
Wonderful.

{{00:02:26}}
And yes, I remember last year
we were talking about the, us

{{00:02:30}}
vari variations in approaches.

{{00:02:33}}
so yeah, looking forward to seeing
how that develops later in the year.

{{00:02:37}}
I also wanted to talk to you about,
a regtech and its adoption rate.

{{00:02:42}}
can you tell us more about
its development in the future?

{{00:02:47}}
Regtech is, of course, one of the
more exciting areas or emerging

{{00:02:51}}
technology areas in the field.

{{00:02:55}}
I am going to start by quoting
Cecilia Skingsley, who is the B.

{{00:03:00}}
I.

{{00:03:00}}
S.

{{00:03:00}}
Innovation Hub.

{{00:03:02}}
she said there's been lots of talking and
excitement in the regulatory community

{{00:03:07}}
about regtech over the past decade.

{{00:03:10}}
However, a lot development and
commitment has yet to come in the space.

{{00:03:15}}
I definitely agree with her.

{{00:03:18}}
The reality is, if we look at the
regtech industry as a whole, it has

{{00:03:22}}
been experiencing organic growth
in the last decade, especially in

{{00:03:27}}
light of the need for automation,
efficiency gains on in particularly

{{00:03:33}}
on regulatory analysis, right?

{{00:03:35}}
And dealing with regulatory
demands and requests.

{{00:03:38}}
However, I think there are quite a
few main components that requires,

{{00:03:43}}
tinkering and understanding
and appreciating the nuances.

{{00:03:47}}
One is on the, we'll call them the
jurisdictional variances, because

{{00:03:50}}
they are highly dependent on the
regulatory setup, the nature of the,

{{00:03:56}}
or the foundation of the regulations
and rules in different jurisdictions.

{{00:04:00}}
As well as that engagement model.

{{00:04:03}}
In that sense, the other
thing I think more commonly is

{{00:04:06}}
what we call their use case.

{{00:04:08}}
The use case often is a consolidation or
compilation of a few key factors such as

{{00:04:14}}
the data request, the data consolidation.

{{00:04:17}}
Data reporting, both on
regulatory side and bank side.

{{00:04:23}}
there's also called regulatory sentiment
analysis, regulatory semantics analysis

{{00:04:29}}
in that sense, in particularly, I
think, from the private sectors or the

{{00:04:33}}
industries in this end, what regulators
are talking about, most concerned about,

{{00:04:38}}
and above all is how do we achieve that
automation and processing efficiency?

{{00:04:45}}
so that's the underlying technology
being used in this space.

{{00:04:48}}
and it's by no means an
easy problem to solve.

{{00:04:52}}
So in recent years, we have seen,
for instance, deployment of something

{{00:04:56}}
like Gen AI in this space to help
process some of the regulations that's

{{00:05:00}}
currently in the public domain, with
a varying degree of success, right?

{{00:05:04}}
Because again, these are highly dependent
on the regulations that has been written

{{00:05:11}}
within different jurisdictions, and they
don't quite commonly have the same style.

{{00:05:16}}
So I think we'll see a lot of excitement
in this space to come, especially

{{00:05:20}}
with advancement of technology.

{{00:05:22}}
But again, as Cecilia has said
very artfully, we need to just

{{00:05:29}}
get on with it and do and execute.

{{00:05:32}}
So I think exciting space
to be in and more to come.

{{00:05:37}}
Wonderful.

{{00:05:39}}
and finally, I just wanted to talk
about RiskMinds International.

{{00:05:42}}
we already mentioned it.

{{00:05:43}}
no doubt we'll be talking about Basel
III, at the event, certainly under

{{00:05:49}}
the Global Risk Regulation Summit.

{{00:05:53}}
but what are you excited to
talk about this year and what

{{00:05:55}}
are you excited to learn about?

{{00:05:57}}
I think RiskMinds International has
always been this excellent platform to

{{00:06:02}}
combine a varying sub communities within
our risk and compliance management field.

{{00:06:11}}
So if we look at what RiskMinds last
year delivered, it was essentially not

{{00:06:16}}
just bringing also regulatory analysts
or policy makers into the space, but

{{00:06:22}}
also risk managers, which addresses
emerging risks, as well as traditional

{{00:06:27}}
financial and non financial risk on top
of compliance officers for the first

{{00:06:31}}
time, which talks about essentially the
challenges such as sanctioning financial

{{00:06:36}}
crime and the compliance management.

{{00:06:38}}
So I think this year it will be
again the same community of people

{{00:06:43}}
in getting together and compare
notes in a very robust manner.

{{00:06:48}}
So this is absolutely a standing
point of RiskMinds International.

{{00:06:52}}
And on top of that, as we live in an
ever increasingly geopolitical tension

{{00:06:58}}
rich society and the world, so as we
speak today, I think the War's ongoing.

{{00:07:06}}
There are lots of elections that has taken
place and about to take place this year.

{{00:07:12}}
it's in particularly in the West.

{{00:07:14}}
So how do risk managers, policy makers
and compliance officers deal with this

{{00:07:20}}
ever increasing geopolitical pretension?

{{00:07:22}}
What becomes a hot topic as well?

{{00:07:24}}
I think if I recall a few years
back, RiskMinds actually was one

{{00:07:28}}
of the first conferences brought
geopolitical risk into the front

{{00:07:32}}
and centre of the day one agenda.

{{00:07:34}}
And I look forward to hearing
these discussions and debate as

{{00:07:39}}
well in the RiskMinds main event.

{{00:07:41}}
Wonderful, Shearin, thank you
so much for joining us today.

{{00:07:44}}
And I look forward to
seeing you in November.

{{00:07:46}}
Thank you very much for having me.

{{00:07:47}}
Thanks.

thank you very much for joining
me today at RiRiskMindsQ.

I just wanted to talk to you
today about the Basel reform.

Tell us what can we expect
by the end of the year?

The Basel reform is on everybody's
mind this year, because I think this

time last year, we were hoping to get
a bit closer to the finishing line.

I would say that we're
definitely getting closer.

We are expecting the consolidated UK
rule set shortly, hopefully, in a matter

of, months ish weeks, which means that
essentially along with Europe, both

UK and Europe would have essentially a
consolidated rule set by end of this year,

although the slight nuance there is the
European banking authorities do work in

through various level two, legislations
and regulations, so as we speak.

And as an industry, we're supporting
them on this journey, hopefully,

to help them get it closer to the
finishing line by end of this year.

the go vife timeline is
obviously in everybody's mind.

Europe literally just announced
the delegated act for FRTB, which

means the market risk component
will be delayed by about a year to

1 Gen 2026, although the rest of the
package will go live in 1 Gen 2025.

And I think UK hasn't committed
any adjustment to the timeline.

So currently the UK timeline remains
to be 1 July 2025, and we'll see

what the Bank of England says as of
when the rules are being published.

no doubt, the US timeline remains
one of the biggest variables and

Hopefully, later this year, we'll be
expecting the revised proposal on the U.

And, hopefully again by end of this
year, we'll have three different

And hopefully we'll, be able to
get together, at RiskMinds and I

think talk about the differences
and nuances, I think, across all

But, definitely, as I said,
beginning of this question.

We are getting closer
to the finishing line.

And yes, I remember last year
we were talking about the, us

so yeah, looking forward to seeing
how that develops later in the year.

I also wanted to talk to you about,
a regtech and its adoption rate.

can you tell us more about
its development in the future?

Regtech is, of course, one of the
more exciting areas or emerging

I am going to start by quoting
Cecilia Skingsley, who is the B.

she said there's been lots of talking and
excitement in the regulatory community

However, a lot development and
commitment has yet to come in the space.

The reality is, if we look at the
regtech industry as a whole, it has

been experiencing organic growth
in the last decade, especially in

light of the need for automation,
efficiency gains on in particularly

And dealing with regulatory
demands and requests.

However, I think there are quite a
few main components that requires,

tinkering and understanding
and appreciating the nuances.

One is on the, we'll call them the
jurisdictional variances, because

they are highly dependent on the
regulatory setup, the nature of the,

or the foundation of the regulations
and rules in different jurisdictions.

In that sense, the other
thing I think more commonly is

The use case often is a consolidation or
compilation of a few key factors such as

the data request, the data consolidation.

Data reporting, both on
regulatory side and bank side.

there's also called regulatory sentiment
analysis, regulatory semantics analysis

in that sense, in particularly, I
think, from the private sectors or the

industries in this end, what regulators
are talking about, most concerned about,

and above all is how do we achieve that
automation and processing efficiency?

so that's the underlying technology
being used in this space.

and it's by no means an
easy problem to solve.

So in recent years, we have seen,
for instance, deployment of something

like Gen AI in this space to help
process some of the regulations that's

currently in the public domain, with
a varying degree of success, right?

Because again, these are highly dependent
on the regulations that has been written

within different jurisdictions, and they
don't quite commonly have the same style.

So I think we'll see a lot of excitement
in this space to come, especially

But again, as Cecilia has said
very artfully, we need to just

So I think exciting space
to be in and more to come.

and finally, I just wanted to talk
about RiskMinds International.

no doubt we'll be talking about Basel
III, at the event, certainly under

but what are you excited to
talk about this year and what

I think RiskMinds International has
always been this excellent platform to

combine a varying sub communities within
our risk and compliance management field.

So if we look at what RiskMinds last
year delivered, it was essentially not

just bringing also regulatory analysts
or policy makers into the space, but

Expert Insight

Shearin Cao, EMEA Regulatory Engagement Function Director - Regulatory Policy, Citi, joins us to talk about the upcoming Basel III updates and its impact on the finishing line. She also shares her take on regtech adoption in financial services and where developments are required for specific use cases. We close the conversation on the upcoming RiskMinds International conference and key discussions we will be having with 1200+ senior risk leaders.