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Regulatory intelligence

With RegTech comes the emergence of a “digital ethics” officer

Henry Engler  North American Regulatory Intelligence Editor

Henry Engler  North American Regulatory Intelligence Editor

A "digital ethics" officer and other roles tied to adoption of innovative technologies will be required by banks to ensure the integrity of business processes as they adopt regulatory technology, or "regtech," a senior industry official said last week.

Speaking at a regtech conference sponsored by the American Banker in New York, Yvette Hollingsworth Clark, an executive vice president and regulatory innovation officer at Wells Fargo, said: “The skill sets you will need to support this (innovation) are going to change.”

Foremost in the expanded skills set is an understanding of computer programming.

“Someone who understands ethics will need to understand code,” she said. She cited a “digital ethics officer” as an example of the type of role that’s likely to emerge.

The adoption of machine learning and artificial intelligence in the compliance function will undoubtedly affect jobs, participants at the conference agreed.

“There will be job losses,” said Graham Bailey, EVP and deputy BSA officer at Wells Fargo, on a separate panel.

Recruitment professionals say demand for traditional financial compliance jobs has suffered as hiring managers look for computer engineers or candidates with technical certification to fill new positions. And while not everyone is looking to hire “data scientists” to fill compliance roles, there is growing demand for different skills.

“We’re seeing more roles for transformation and innovation,” David Choi, U.S. RegTech leader at the consultancy PwC, told a panel focused on how banks were adapting to new technologies.

The introduction of algorithms to run various business processes will require those in control functions, such as compliance, to understand how the technology works – especially when something goes wrong, Clark of Wells Fargo said.

A former Federal Reserve official, Clark said the “scope of ethics is creeping into the technology space,” and that the “integrity of the process will create new opportunities for risk professionals.”

“We will need to understand how technology is designed and employed,” Clark told Regulatory Intelligence after her formal remarks.

Among the areas that are likely to most affected by regtech solutions, Clark put regulatory reporting and monitoring at the top of the list. In addition, she said, innovation should enable more “automated regulation,” allowing firms to incorporate new rules or changes to existing regulation seamlessly into their operating and controls systems.


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This article was written by Henry Engler and produced by Thomson Reuters Regulatory Intelligence.

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