With the rapid development of fin-tech revolution, converting regulations into algorithms could be the road ahead for financial regulators. Explain (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Accelerated changes in technology is making regulators extremely nervous. Central banks’ concern with cryptos and other digital currencies is well-known.
· Fintech revolution is fundamentally changing not only products and processes in the financial sector; it is also making things more challenging for financial sector regulators.
· The general response to these and other regulatory capacity/efficiency questions has been in terms of strengthening the human resources of regulators and by using some basic technology based inputs such as call records data, call location etc. by their investigation teams.
· They also use technology-based approach to market monitoring and surveillance. In a world of slow technological changes (tech evolution) probably such approaches would have been sufficient.
· Warfare technology from ancient times onwards have taught us that for every weapon being deployed by your opponent, you have to use an appropriate counter weapon.
· It is also important that trading or other operational data are logically arranged to facilitate writing the algos effectively so as to capture the trigger points of violations effectively.
· There appears to be no other effective way in regulating the sophisticated, new age market players and other financial sector operators except by ‘front-running’ them using appropriate technology as the counter-weapon.
Rekha 3 years
Kindly review mam/ sir
IAS Parliament 3 years
Try to include data to support your answers. Keep Writing.
Rekha 3 years
Manish 3 years
Please Review !
IAS Parliament 3 years
Try to provide a comprehensive conclusion. Keep Writing.
