On the role of ontology-based RegTech for managing risk and compliance reporting in the age of regulation
Abstract
This paper addresses important questions such as: what challenges are presented by new regulation to banks’ infrastructure, risk management and profitability, and how can these challenges be best addressed? It also examines the potential impact FinTech has on the riskiness of banks and proposes RegTech as the solution. Following a brief overview of the impact and costs of regulation since the financial crisis, the paper introduces RegTech in the context of challenges facing financial institutions and the limitations of governance, risk and compliance (GRC) systems. This paper’s main contribution is in its delineation of a regulatory compliance and risk ontology, the technologies that underpin it and the related objective-risk-control (ORC) model. The paper argues that these provide a platform on which RegTech can perform effective risk management and compliance reporting in a global post-crisis regulatory environment.
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Author's Biography
Tom Butler is Professor and Principal Investigator of the Governance, Risk and Compliance (GRC) Technology Centre, University College Cork, Ireland. Tom’s research at the GRCTC focuses on the development of RegTech and RiskTech solutions for the financial and legal sector. Specifically, his research focuses on applying innovative digital technologies (based on semantic technologies, ontologies, artificial intelligence, machine learning and risk data virtualisation) to address the problems of risk management and regulatory compliance and reporting in the financial industry.
Robert Brooks is a thought leader in integrated risk management and has advanced new methods on, and approaches to, the management of enterprise risk. Robert’s primary emphasis is on re-establishing the link between risk, corporate strategy and business objectives. He has co-written several papers on this subject and presented his research at a number of conferences. Robert is the Director of Financial Services GRC for Deloitte UK, covering process re-engineering and tooling support for all areas of non-financial risk. He is also an Associate of the GRC Technology Centre.
Citation
Butler, Tom and Brooks, Robert (2018, February 1). On the role of ontology-based RegTech for managing risk and compliance reporting in the age of regulation. In the Journal of Risk Management in Financial Institutions, Volume 11, Issue 1. https://doi.org/10.69554/LXST2119.
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