Global Trustee and Fiduciary Services News and Views Issue 50

Global Trustee and Fiduciary Services News & Views | Issue 50 | 2018 53 In the asset management space, this introduces cross-cutting themes such as artificial intelligence (AI), machine learning, big data, KYC and e-payments. Other areas include: • Internet-of-things (IoT) • Distributed ledger technologies, including blockchain • Crowdfunding • Cryptocurrencies • Robo-advice • And automated rulebooks Fintech also encompasses regulatory technology (regtech) where technology is used to help firm’s ensure they meet their regulatory requirements e.g. automated investment and borrowing powers checks, and supervisory technology (suptech), where regulators are introducing new technologies to aid in their oversight duties. This section of News & Views looks at the intersection between trends in the regulatory space and financial innovation, such as: Signs of the times New technologies may not be disrupting the asset management space so much as their proponents promise, but changes are being made to the way firms obtain, manage and process the vast quantities of data at their disposal. Companies can now put their information to work by identifying novel patterns that can help drive productivity, save costs and create new solutions for their clients. In the not too distant future, investment decisions made on our behalf could be based on an encyclopedic knowledge of our attitudes to risk, views on the environment, health, maybe even our exercise regime, all derived from the personal information we hand over to automated systems on a daily basis. FINANCIAL INNOVATION Financial innovation can mean different things. When searching online for a definition of financial technology (fintech), for example, it’s broadly defined as any technological innovation that aims to compete with traditional financial methods in the delivery of financial services. Regulators on balance Regulators are increasingly focusing on the use of innovation in safe environments, such as innovation hubs, and undertaking tech-sprints. This is alongside the use of sandboxes. In the UK and the US regulators are even testing the possibility of introducing “robo” (automated) rulebooks and have been successful in testing a process whereby a rule, written in plain English, is read and interpreted by a computer which then generates a report using a firm’s data. Most recently, the Monetary Authority of Singapore and the US CFTC are the latest regulators to sign up to cooperate on a Financial Technology Innovation Arrangement. Crypto comes of age Many people utilise terms such as “crypto” and “ICOs”, but what are they? Bitcoin, and with it the digital currency revolution, was born in 2008 but the concepts behind it gestated for nearly 25 years. Our final article in this section looks at the origins, potential uses and risks involved in their ongoing development. Amanda Hale Head of Regulatory Services, Global Trustee and Fiduciary Services Citi