 We tended to find out quickly that when you're sort of talking about benefits and risks of Fintech, that a lot of it will depend on the particular application that you're talking about. There are some themes, data privacy, data protection, that tend to run across different types of tools, but very type of different considerations may come into play depending on the type of technology you're talking about. And this is whether it's something that is on the industry, consumer side, or whether it's on the regulator side. The other and the last one where I've got some experience is there are global implications for these types of technologies in both Fintech and Regtech. There's a lot of sense that need to avoid creating opportunities for regulatory arbitrage, whether it's between competing industrial policies between countries about attracting Fintech business, and the need for regulators to end the private sector to address a lot of the data issues, find out a way to use the data, share the data, cooperate over the data and the opportunities that are being provided by this little explosion of data. For the law students that may be here, I will note that these reports as well as one done by IOSCO do have sections in the back on some of the legal issues that are out there. We heard a couple of them touched upon yesterday with respect to finality of settlement, blockchain, and then try and imagine this on a global scale. So I think there probably is some fruitful exploring of things potentially for notes or other studies of interest. Getting to the definition of Regtech. One of the international bodies that OFR and a number of the U.S. regulators and members in OFR provides technical expertise to the Financial Stability Board issued a report last month on artificial intelligence and machine learning impacts, potential impacts for financial stability. The definition that was used in that report for Regtech is quotes often regarded as the subset of Fintech that focuses on facilitating regulatory compliance more efficiently and effectively than existing capabilities. I would note that the Chair of the Commodity Futures Trading Commission, Giancarlo Early this week, or maybe it was last week, gave a speech at a Singapore Fintech Festival and he used the definition of Regtech there as the use of technology-driven innovation to increase the effectiveness and efficiency of business compliance with an increasing number of rules and regulations. So you see an emphasis on effectiveness and efficiency and the sort of desire objectives of different types of Regtechs that you hear. It has become somewhat, and this is in the words of another market participant, a marketing buzzword. What it really needs to address though is to address the cost and efficiency of adhering to regulation. And so looking for cost reductions and efficiencies with existing regulations I think is one of the primary drivers of what folks would consider the Regtech scene. What this landscape actually looks like. I've got this portion I titled to myself which show me the money and you'll get the reference to the marketing buzzword. I'm citing from a PWC issued a regulatory brief in October 2017 on Regtech and they've got research indicating that there's more than 250 Regtechs in the market and the industry has raised over $2 billion in funding with the close half of that being since 2015. What's been interesting is what started out as an area for angel investors and venture capital funds is now swinging more towards being seeded by corporate venture capital. So I think you may see more of the incumbents buying into some of these late stage Regtech investments in terms of funding trends. And in terms of pain points, and this was made and the point was made in the last panel, where is this money being spent? Sort of where are the dollars chasing, the applications that can help get these efficiencies and effectiveness and compliance. By a large, large margin it's on financial crime surveillance and this goes to comments Michael was saying about the complexities of the current systems and this is the type of money and assets that's being put in to try and find more cost effective solutions. It's also being used for scenario modeling and analytics, enterprise risk management, risk aggregation and reporting and then in smaller buckets, front office compliance and controls, digital identity and regulatory affairs. In terms of what the landscape looks like, how regulators are trying to explore ways to both promote and benefit from fintech developments into Regtech, you probably have heard and are about to hear a little bit more about different, we'll call them playgrounds for exploration because I've been caught short and being told that not all sandboxes are alike. There's definitions that the international financial regulatory community, some working definitions that they have developed, an innovation hub is described as a place to meet and exchange ideas. An accelerator is a boot camp for startups culminating in some sort of pitch presentation and a regulatory sandbox is testing in a controlled environment with tailored policy options. These types of descriptions are ones that have come out from a recent Basel Committee report between their efforts and the efforts of the Financial Stability Board. They have done some quick snapshot surveys of just how active this type of activity is globally. Out of 26 jurisdictions surveyed by the FSB, 14 of them had or are planning some sort of one of these different types of mechanisms with the varying levels of engagement. They also noted that there have been actually specific regulations that have been promulgated to address fintech issues by different regulators. There were over 15 jurisdictions were in the process of rules or issuing guidance on typically, and I think we've seen a lot since over the summer on virtual currencies, payments and cybersecurity. So it's a very active field in terms of regulatory perspective and foment. And I would also say that I think the perspectives that Julian Tett brought yesterday about the events leading up to 2008, what have we learned, what's different from an anthropological point of view. I was taken by her descriptions of sort of an industry and regulators trying to oversee something that was opaque, had this distinct vocabulary, that was trying to fly low under the radar, the more boring, the better were some of the catch words. I would think that hopefully with the advent of fintech and regtech, it is a bit different. The fact that the regulators are looking at different vehicles to create engagements because there is a way to capture these fintech developments to help them and their regulatory oversight and systemic risk monitoring is different. The other thing that I think is different is the actual depth of level to which regulators are using some of these tools in the vocabulary stream that goes this, you will sometimes hear referred to as soup tech or supervisory tech. It may depend in part on the regtech, so it may depend on what you're getting from your regulated entities, how good that data is, how standardized that data is, doing shout out for LEI that we'll hear echoed later on. That will end up sometimes being the fuel for better supervisory techniques. But regulators are also looking outside the usual remits to try and take advantage of these things. There was a very interesting article describing some of the Bank of England's experiments in this area. The title was identifying Uber risk. So certainly something that's fairly catchy and with Uber risk being something that obviously could upset incumbents and the question is whether those might exist in the financial sector and the potential for Uber risk to create financial instability. And instead of depending upon the steady stream of regulatory reporting data that comes up, they looked at a unique data set, one created by Crunchbase, which is a startup tracker. And their idea was to try and identify through use of machine learning algorithms, unicorns, the firms that may have valuations of over a billion dollars, then try and find out networks that may be ones within the UK that they may bear watching in order to sort of monitor for systemic risk. When they ran their algorithms on the Crunchbase database, they found 20 clusters one of which contained around 3,000 firms, but then they narrowed that. There were 60 unlisted fintech firms, several of which were in the UK. So they are now adapting this as a signal and how they are monitoring for potential financial stability risks within the complement of other data that they are receiving. Colleagues at the SEC also have talked publicly about they're using machine learning to identify patterns in the text of SEC filings. And with doing those and comparing outcomes to find risks about where to target limited resources and overseeing investment advisors, when they have used some of these supervised machine learning techniques, they believe that they are finding averages of five times better than random. That's better than random, but it's still something that is helping to narrow the challenges that they face in trying to take limited resources and address risk assessment in the asset management space. I'll just quickly close with a note about these Basel consultation paper on principles for sound management of operational risks. It sounds really techy and wonky and it is, but when you take a look at the observations they made, they have very good scenario analysis about what the potential for disruption, particularly in the banking industry, could look like from a continuing current state of perhaps competition between incumbents and startups to where you might end up if you had a much more disintermediated chain. They've posited some considerations for banks and some for bank supervisors. They have put an emphasis on looking at strategic and profitability risks, operational risks before cyber risks we've heard and compliance risks. They said for use of these enabling technologies, they want to make sure that banks are looking hard at their effective IT and other risk management processes for effective control environments. There is a discussion and encouragement of developing industry standards on operational risk and cloud-based banking. And so there's been some discussion here about parameters between private and public sector and where they can be drawn and best engaged. And this is one area on cloud-based services that is bubbling up to the front. And on the regulators, I don't think you're going to see too many surprises here. Amongst the biggest challenges that there are going to be keeping up to speed in terms of regulatory skill sets and things like cross-border cooperation, the resource-driven opportunity like we have at the conference here today to hear and keep current with what current developments are and the way to perceive and look at risks are all really important to this dynamic going forward. We will have one, we have one pre-prepared lightning around question that I will take some time at the end of the different presentations to do before breaking open for others. But I'm very happy to have my colleagues come up and put some more context on this. So I'm going to stay seated down here. I want to start off with the disclaimer so you guys can sleep while I'm giving it. The views explained here are not necessarily those of FINRA or my colleagues in FINRA represent my own views. Wake up time. So my name is Jaime Werke and I head up FINRA's Office of Emerging Regulatory Issues and I always like to kind of describe us as sort of being like the weatherman for FINRA. Weatherman obviously can tell into the future but they can make prediction based off kind of the current conditions of what's likely to happen. Similarly, we try to look for storms or brewing the securities industry and then try to find out what they're likely to impact. So that can run a gamut of a lot of different things but one of the areas we've been focusing a lot on lately is FinTech. So maybe I'll just ask you guys, how many people here think FinTech is likely to revolutionize the financial industry, say within the next five years or so? How many people think it's kind of just a side note and it's mostly nomenclature and buzz terms? Couple. So I'm going to give you my take even though you didn't ask for it. So I have three kids. My youngest is five years old and this was the first Halloween where she kind of really knew what she was doing and she picked out her own costume. She was Dorothy from the Wizard of Oz and she had a little purse and she had a little stuffed animal. She renamed Toto and she was just very happy that day. She was buzzing around and then once she got some sugar in her she was even more happy. And at the end of the night, she came up to me and goes, you know what dad? This was the best day ever. And then a week later, we went ice skating, had some pizza, pretty good day as well. And then at the end of the day, she said to me again, you know what, this was the best day ever. And I almost think it's like that, right? So I mean, there's really some good that's blurring and fintech. There's a lot that's actually occurring but you can't just listen to the hyper bowl of everything's going to change right away. So the people who didn't raise their hand either because they're lazy or they didn't want to, I think you're probably closest to being right. I think it's somewhere in between. And you know, as we think about fintech, what we've been trying to do at FINRA is really try to figure out where's the real meat, what's actually changing in the industry. And as part of that, we've launched an initiative a couple months ago referred to as the Innovation Outreach Initiative. And it's really designed to try to engage with fintech firms as well as try to figure out what we can do better or different at FINRA to try to make the atmosphere for innovation more prosperous while still keeping in mind our ideas of investor protection and market integrity. So the Outreach Initiative has several different components, one of which is to develop a fintech industry committee when actually the committee actually just had its first meeting last month that's composed of both member firms and non-member firms are operating in the industry as well as observers from the SEC and NASA to kind of get a broad set of views about kind of what's actually happening in the marketplace now. What are the real things that are changing and what are the real issues people are running into? Related to that, we've also launched a series of regional round tables so we can actually go to firms where they are. We had our first one in San Francisco about a month ago we're having another one in Dallas at the end of this month and really there it's to kind of get a broader perspective from firms about kind of what's going on. And I think we've found even though we've only kind of done two, there's different views with respect to different region. You'd expect some place like Silicon Valley to have kind of a large number of fictive firms and their set of views may be a little bit different than what you might find kind of a more niche plate and fictive firms might find in Dallas or another region. So I think that that getting kind of the broader perspective of where people are coming at and what people are seeing I think has been helpful to us. And we've also been looking to put information out. So I encourage all of you to go to FINRA.org-Fintech another plug FINRA.org-Fintech shamelessly. But it's through it, we've put out various publications one of which relates to the blockchain report that we put out earlier this year that really takes an in-depth look at all the different areas within blockchain that are being explored within the securities industry and talks about what some of the regulatory requirements are that potentially apply and what considerations people need to give. Similarly, we developed a report on digital investment advice that was put out a little over a year ago. And then we've also more recently developed investor alerts to really more gear towards investing public one on ICOs that came out just about a month ago. We've done others on crowdfunding and virtual currencies as well. And finally, if we've tried to kind of work with other regulators to increase engagement on both a domestic basis and a national basis working with folks like the UKFCA which has really taken a leadership role in this area as well as ESMA, ASAC and some others as well. And then domestically with kind of the alphabet soup of regulators that you can imagine. And so this panel is really about reg tech and reg tech is actually an area that we have started focusing in quite a bit more recently and that's more recently I would say probably saved in the past four or five months. We've talked to I would say over 12, over a dozen vendors and we've talked to maybe about a half a dozen financial entities that are developing features for reg tech. And I've kind of tried to bucket it to different areas so help us think about it. Like there's five different areas of categories where reg tech applications that we're seeing right now. One of which is in like surveillance and monitoring. So this is like trade surveillance. So trades that affirm as a person a trading desk may be doing monitoring can include things like monitoring communications whether it be email or otherwise that firms, the firm employees engage in or their customers may engage in and trying to be able to put those in a way that's not rules-based which is really have a lot of that surveillance is conducted currently, but more in a predictive base either using tools like AI or even in some cases big data and using big data analytics is associated with it. Another area that we've been looking at is around customer identification, AML. This was kind of referred to a little bit in the last segment. There have been some developments at least prototypes of utility based systems that look to use things like blockchain technology so that people actually house the information themselves. So that you're able to as a customer have access to the data that the people would need in order to know who you are but then give rights to other people within the context of the blockchain to be able to say, okay, I gave all this information to Bank A. I wanna go to Bank B, but I don't wanna reproduce everything. If information is already set up into the blockchain and I can permission it so they can give it to Bank B, it saves both Bank B and yourself a lot of time. So that's one of the areas, but also in AML similar to what we heard about in surveillance use of AI and other types of techniques in order to be able to better analyze and give less false positives. So the amount of work that the people do may not change, but you're actually getting better data so the things, the leads that you're getting you're actually following up with and they're actually real things to be following up on. A third area we've been looking at is around investor profiling. And this really goes to trying to determine the risk tolerance of individuals as well as their risk appetite. There have been a lot of tools that have been developed using behavioral economics as well as game theory that don't just ask people kind of, do you like to take risk or not? And you might get different answers, but frequently people don't really know until like the market goes down how they react. So there's different tools that people are looking to build to try to predict kind of what those reactions would be. So you wouldn't just have to directly access it but you can infer from different, the reactions, different games or different scenarios. Another area is on regulatory intelligence. So this really revolves around the idea that you're able to automate a lot of the new knowledge that's gained from different regulations, especially new regulations that come on board. So for example, if you have a new regulations, you're regulated by three different entities, which happens frequently in the financial industry. If the new regulation comes out say from a state regulator or comes out from a securities regulator, these tools that the vendors are building will basically tell you kind of, this is what you need to watch out for, this is what they relate to within your system. So you may wanna go check, say like your reporting requirements because this is a rule that relates to reporting. On the regulator side, there has been some very interesting work done by the UK FCA as well, those looking to develop kind of machine readable rule books. And what this means is basically a two-fold. One is kind of developing a taxonomy so that you're able to figure out something maybe a surveillance related rule or maybe a record keeping rule, but it may not have those words within the rules itself. So developing a taxonomy so you can actually tag it and be able to figure out what it is. And then also on top of that, potentially looking to see if you can write the rules in a way that's easier for a machine to comprehend. All right, so that's a big step. But that feeds into some of this automation of the compliance function potentially that you could have within rules. Now I've heard things like, eventually regulation is gonna become code. I'm not quite there yet, but it's an interesting idea. So in the final area is risk and management. And really here, you're seeing a lot of use of big data analytics. You're seeing use of things like natural language processing to try to figure out ways where you can better get at what the actual risks are and try to mirror or marry up information that may exist with various units of the organization. So it's like I said, it's an area that we're looking at quite a bit. I think it's one that's changing. And I think that's one that potentially has the ability to both reduce costs and actually be more effective if it's done right, obviously. I will sit too. Hi, good morning. My name is Mora Vahi. I am with the Consumer Financial Protection Bureau. I am an acting director for the Project Catalyst Initiative, which is akin to our Office of Innovation. I wanted to give a brief overview of the CFPB of our Project Catalyst program, highlight some of the priorities in our innovation work, and then tie that back to how we're working to support RAGTECH as the bureau is gathering, kind of in an information gathering phase right now. For RAGTECH, thought of as a subpart of the FinTech work we're doing. As many of you are aware, the CFPB is a federal regulatory agency. It was formed about six and a half years ago through the Dodd-Frank Act following the financial crisis. We are charged with overseeing consumer financial markets from mortgages to lending to student loans, credit cards, et cetera. This work was previously spread out across seven different federal regulatory agencies, all with a consumer protection component, but now is housed with a sole federal regulator. Our mission is to protect consumers by promoting financial markets where consumers can understand costs, benefits, and risks when they're accessing financial products and services. This is what we call no before you owe. The idea is that consumers should be able to make decisions that are free in a marketplace from unfair, deceptive, or abusive acts and practices. We have a mandate unique to a federal regulatory agency in that we oversee both bank and non-bank financial institutions. We are able to look across product lines rather than by institution type through our oversight work. This is particularly relevant as we think about fintech as fintech companies in the non-bank space are mostly all touching the banking space and we're able to uniquely get a viewpoint into that. The Bureau, in addition to our oversight and enforcement work, has a mission to promote a marketplace with consumer-friendly products and services. As many others at the conference have discussed this rapid development in the fintech space and influencing how consumers are conducting their financial lives, we are monitoring this at the CFPB in a way that we're looking at both benefits and weighing risks and how this impacts consumers. Our role is really to keep consumers top of mind through this innovation and development and that takes me to Project Catalyst. Our mission is focused on promoting consumer-friendly innovation in the marketplace, specifically under the Dodd-Frank Act. We have a statutory purpose to implement and consistently enforce federal consumer financial laws in order to ensure that everyone has access to the consumer financial markets that are fair, transparent, competitive and is part of that directive. The Bureau has an explicit statutory objective to ensure that the markets for consumer financial products and services operate efficiently, transparently and facilitate access to innovation. And through that mandate, Project Catalyst was first formed in 2012 with a strong focus on encouraging engagement with the innovation community that perhaps doesn't have the traditional channels to interact with the federal regulator that traditional financial institutions may have. So Project Catalyst is a special project that oversees a number of initiatives. At the Bureau, we facilitate research pilots. We work with our Office of Research and any stakeholder, mainly companies, have come to the Bureau with a research idea or product and service they're interested in testing. They can collaborate with us, run tests, share information to inform our broader agenda and find interesting research results. An example of one that we did in the past year is with American Express. We collaborated with American Express to test a savings wallet feature that ultimately our research showed deterred the use of alternative lending products like payday loans and small incentives allowed consumers to save double at the rate that they did without these incentives. Another, we've done about eight research pilots since we started Project Catalyst. We recently announced another research pilot with Credit Karma which is a personal finance company that allows free access to credit reports and scores. With Credit Karma right now, we are doing a research pilot where they are providing a financial wellbeing survey that the CFPB developed to their customers and then allowing us to see insights into objective financial characteristics of consumers as well as their engagement with education tools and then that can help us understand how this correlates with consumer financial wellbeing. So that's just an example of some of the research pilots that we're doing. Some of the other programs that we oversee, one is a trial disclosure waiver program. Under Dodd-Frank, we have the ability to waive federal disclosure regulations. So we have a program set up if you are a company interested in providing consumer disclosure in a more friendly way than the current regime allows for, perhaps on a mobile phone or using the internet. Some of these weren't envisioned when the disclosures were created. You can come to the bureau and apply for a waiver and have a test period to test these disclosures. You share data with the bureau about its effectiveness. An ultimate goal would be to improve disclosures in this space. The other program we have is called a no action letter. The no action letter is a program we oversee for emerging financial products and services that believe they have the promising consumer benefits but may be operating in an area of some regulatory uncertainty. We did actually issue our first no action letter about two months ago to a company called Upstart. It is an online lending platform that relies on alternative data and machine learning. They received a letter from the bureau for three years stating that the bureau does not intend to take any supervisory or enforcement action. And as part of that agreement, they will be reporting lending information and compliance information back to the bureau over the next three years that will help inform our work in the alternative data space which I know many people have spoken about at the conference around credit, invisibility and increasing access using new technologies. So we have, those are the programs we oversee. We are also very actively involved engagement with FinTech and kind of the innovation community more broadly. This informs work across the bureau. We have an office hours program that's fairly popular. We hosted on a quarterly basis at least. We've also started doing some office hours that are focused on very specific topics of interest to the bureau to kind of help facilitate feedback from those stakeholders for broader bureau work. The office hours program, one example of that is we recently did an office hours program with our office of students. We oversee private student loans, student loan servicing and have an office that serves as an advocate for student loan borrowers and young Americans. We did an office hours program with them and it resulted in a report on promising innovations in student loan repayment programs. These are the kinds of programs that are often offered by a third party service provider, often an employer perhaps as a 401K may be offered and gave us a lot to think about in that space. We made a series of policy recommendations about being able to take advantage of new technologies to tackle the mounting student debt crisis and allow third parties to make payments, but also recognizing there are challenges in this space, especially when these newer fintechs are interacting with certain student loan companies or servicers that have legacy systems and the kinds of challenges they're facing and also as new fintechs enter the space being thoughtful about public policy issues such as public student loan forgiveness, income-based repayment and integrating that into from the outset for the products and services they're developing. So now I just pivot to a few of the outputs of this engagement across to inform the Bureau of Work. One, as I mentioned is our work on alternative data to improve credit decisioning and help address credit invisibility. That has been a strong focus for the catalyst team and more broadly the Bureau. We did issue a request for information about a year ago, less than a year ago to inform this work and it's something we're very much engaging on through our office hours program and monitoring through our no action letter now. The other key area is a data access, data aggregation. This is the issue where access to consumer financial account data is really powering a lot of the fintechs that we see out there today that many of which could be providing valuable, potentially valuable services to consumers in helping them manage their financial lives. The Bureau has a specific authority under 1033 section of the Dodd-Frank Act to promote consumer access to data. So we similarly have been hearing a lot about this issue through our office hours and other engagements brought to the attention of the Bureau and it's become a much broader work stream at this point. We issued a request for information last year as well, received over 75 comment letters from a wide range of stakeholders and about a month and a half ago issued principles for the marketplace on secure data access for consumers to which I'd encourage folks to look there on our website and have been fairly well received. And then I guess I would tie this now to regtech. Regtech is an important part of fintech and as mentioned, we're increasingly hearing from companies coming to us in the regtech sector. These are companies that are interested in sometimes in helping our own supervisory or enforcement oversight work. It's also companies that are serving entities that we oversee to improve their compliance work. More broadly, I'd also say as a regulator, I think of regtech as the technology that helps us do our job better and coming at it from a consumer angle. I know a lot of the points discussed in the regtech space are around KYC, AML, ID verification, but in the consumer space, a lot of what we're seeing is a technology that's helping monitor interactions with consumers, companies monitoring social media for UDAP violations, companies monitoring call centers and marketing materials. And that's something that we're particularly interested in seeing from the consumer angle. But that I do a plug for our consumer complaint database and our consumer response function is something we're excited about. We use natural language processing. We've received over a million consumer complaints since we opened our doors that the technology tools, we have a spike in trend tool that we rely on that helps us prioritize and channel this kind of information to our broader work across the bureau. It's also a public database and an API that we're aware regtech companies and other fintech companies are using for compliance work. So that's kind of an exciting example. But regtech is definitely something we're in an information gathering phase for how we can use it to inform our oversight work, but also just how regulated entities are using it as well. With that I just flag a few points as we weigh using this technologies to improve the efficiency and effectiveness of our work at the bureau. One is just our unique authority over bank and non-bank that we oversee tens of thousands of companies from small payday lenders to some of the largest banks. And having technologies that can help us analyze and scope that compliance and risk is important. At the same time, we are a new federal agency and technology has kind of been at the forefront since we were formed top of mind. So we are already using a lot of tools to help us scope this examinations, prioritize risks and also examples like our consumer complaint database. So with that, we are, I would say we're actively, our program project Catalyst is actually working to promote consumer friendly innovation. And the CPB more broadly is working to kind of remain abreast of innovations being used in the marketplace like alternative data, machine learning, et cetera, to do our work to protect consumers. And then we're also interested in harnessing these kinds of technologies to do our consumer protection work as efficiently and effectively as possible. Thank you. Hi everybody. I am your FinTech startup, or RegTech startup which is a new role for me. I am Melissa Coyde and I am CEO of Finreg Lab which is a new organization I'm gonna tell you a little bit about. But I also have background in the financial services sector, I was the Deputy Assistant Secretary at the Treasury Department for the Office of Consumer Policy and part of my responsibility there was really sort of digging into understanding how data, how new technologies are being brought into the financial sector and in particular the retail financial sector. While we're getting my slide set up, I will also say, I must be the tallest person here, it's actually not what I was gonna say but I'm gonna use this RegTech pretty liberally. I will, I'm happy to have a sort of broad conversation about what I've been seeing in the world of RegTech. But for the purposes of this conversation I think it's actually useful to think about how regulators, policy makers themselves are learning about the implications of technology and data in financial services. Notice I emphasize data and technology in financial services as opposed to FinTech because I think that's just a little too somewhat nebulous of a term and it often means certain things to different people. So yeah, so I'm gonna do a little bit of a background about just and also why I think it's important that we really focus on how policy makers and regulators are learning about and understanding the implications, I think the really potentially significant benefits of data and tech in financial services but also major considerations and potential risks. So with that, there is our logo. I will just as a sort of introduction share with you one of my 12 year olds actually helped to create this logo. So it's pretty cool. This is definitely startup days but good stuff. So Finreg Lab, we are setting out to be a new public mission organization that means we're in the process of acquiring our 501C3 status with the IRS but as a public mission organization to really be providing the fact-based answers to pressing questions that are facing policy makers and regulators today when it comes to using data and technology in the financial system. Our ambition is to bring together the best minds from government, from academia as well as from industry to dig in and actually build tests to examine these questions of new data and new technology in financial services so that we are then the platform for information about simply the facts, not as an advocacy organization but simply what are the implications when we think about for instance, new types of underwriting data or new types of data being used for underwriting purposes and credit scoring and credit risk assessment. Now I have to put my glasses on because I can't read anymore without them unfortunately but we are aiming to be this independent fact-based provider of this information that is importantly timely and actionable for the regulators and policy makers. So why do we need this and why do we need this now? I think we've been hearing this for the past couple of days but just to call it out, rapid changes in the technologies, the algorithms that are now being applied to the financial sector, the sophistication of the technology, the ability to actually store mass amounts of information in the cloud and also compute in the cloud, as well as obviously the almost ubiquitous nature of the mobile device, whether it's a simple one or a sophisticated one in the hands globally of billions of individuals. Nevertheless, with these vast data and technology changes, there's enormous potential but as I said, there's also risk that we really need to better understand the implications of the application of those technologies and data. And as we all know, policy makers and regulators are ultimately core to setting what are the rules of the road, what can the financial sector do and not do when it comes to using new data and new technology. Yet without credible facts, without credible information and fact-based information, the ability to think about how you then construct the rules of the road are somewhat limited and I'm gonna dive into, in fact, having sat at the Treasury Department for the past four and a half years, my office and working with my regulatory colleagues across the federal government as well as at the state level, we really are stymied because the information generally that we take in is coming from oftentimes bias sources, now purposely bias sources, but nevertheless, we weren't necessarily finding a place to go and get answers that just simply provide information about the implications without some intention behind the information we were getting. So how do regulators learn today and what are the limitations? There are a lot of words on this page. The thing that I want you to take away is, obviously there are a lot of researchers and economists throughout the federal government system and really brilliant people doing deep dive examinations using data, but when it comes to looking at these questions around the implications of tech and data in the financial system and in financial services in particular, we actually don't have that many dedicated bodies, literally bodies or bodies and agencies really diving deep to answer these questions. We often find that the government research is very macro and focused. Really importantly, the research is oftentimes siloed. It's not necessarily shared across agencies or regulators and it can be challenging, particularly for the regulators to request the research and the information they need to get in order to think about what they may be changing, what they may be updating or what they may want to issue even in terms of guidance around governing the use of data and tech in financial services. On the external types of resources, I said this, but it's important to know, getting the information in from the different stakeholders is critical, but it is nevertheless coming with a perspective and it's not necessarily just starting with the base, what are the facts. So just to give, I think, an important illustrative example, we have, I would say, one of the most obviously consumer-focused but really progressive research-directed technology-based or technology-focused regulators, and that's the CFPB, who has been doing, which has been doing enormous work in really trying to understand the fintech sector. But even with the CFPB, there was, granted to the Bureau, the authority to issue guidance around this consumer access to financial data. And as a consumer-focused as a Bureau has been, it nevertheless took, it's hard for me to actually criticize the CFPB, but I'm gonna call this out. It nevertheless took seven years for the CFPB to be able to get to the place where they were soliciting information from stakeholders about what the implications are in terms of granting consumer access to financial data. And they did do it. They issued an RFI in 2016, which is fantastic, but even there, we're still getting information in, or they're still getting information in, that's coming from the different stakeholders with their different points of view. So how this came up in our conversation yesterday, how does the current regulatory structure compound the challenges that we see? Well, to begin with, many of us in the room know this, but we have at least half a dozen regulatory agencies in the financial governing and regulating the financial sector. And we have, if you are a bank or even a non-bank provider, 72 state regulators. So there's a lot of different perspectives, there are a lot of different agendas, and there are a lot of different processes in terms of how banks and non-bank firms are being regulated and governed generally. And now we're overlaying the complexity of bringing in new types of products that are based on new technologies and new data. So a lot of complexity given our current regulatory structure to really step back and think about in a comprehensive, but also shared across regulators way, what are the implications when it comes to data and tech in financial services? There are a host of other sort of factors here that you can take a look at, but I'm gonna keep going for the sake of time. But even with these complexities, we've heard about the FCA and what they have been doing globally. I think our US regulators and even some of our government agencies do deserve a pat on the back because they are definitely making strides to really understand what is emerging in the financial landscape when it comes to data and tech. We have a number of federal offices that have built their own innovation offices, Amy Friend was here yesterday talking about the innovation office at the OCC. CFTC is building their own and there are others that are actually in the works at the federal level. We also kudos to the CFPB for issuing that first no action letter. That's really a big step because that is actually allowing financial firms to test things that, as you heard, do generate some level of regulatory uncertainty for the firms that are trying out these, in this case, new look at different types of data for underwriting purposes. In the past, we've seen the FDIC undertake some really, I think, directionally wise steps in trying to understand how to pilot small dollar lending products. I would definitely tout that as being somewhat innovative for a federal regulator to do. And at the Treasury Department, a number of years ago, I in my office ran an interagency study group where we actually brought all of the regulators, federal regulators together to dive deep and look at some of the non-bank companies involved in payments. And so these are all, I think, really productive steps, but yet I still think we are, I am struck by the fact that we don't necessarily have coordination across regulators and so much of these developments and these trends require regulators to be talking to each other and understanding and learning together, especially as they think about implications of the data and tech in financial services. Also at this point, what we don't see, but I do hope we see it soon, is actually not just sort of the open doors for the fintech sector to come in and to share what they're doing and to seek guidance on who they should be talking to in the financial regulatory landscape. But what we are not seeing at this point is actually undertaking true empirical tests, looking at data and assessing what does the data mean when you bring it in for doing a better job of identifying somebody for KYC purposes or using new data for underwriting purposes. So a solution, aha, we've landed. I will say this, let me just describe the solution. I think many would agree, and I've been frankly talking with the regulators over the past six months about this new endeavor, Fenreg Lab. And in fact, some of what you see here is actually reflecting what they have said to me in terms of what they would like to see. An entity that overcomes the regulatory limitations and importantly the silos that stymie real-time learning and insights that are fact-based. Really importantly, an entity that offers a scalable way to test with different providers, data service providers, fintech providers, multiple tests at the same time so that it's not just a one firm, let's go learn about that one opportunity, but really sort of simultaneously running comparable and complementary experiments at the same time. And then an entity that allows the safe, and I would say the safe space among regulators to actually share what they're thinking and what they're learning. That's something that I saw in the study group that I was running out of the Treasury Department that clearly is something that is valued where they are able to talk amongst each other. It doesn't mean that there aren't processes for rule writing, FFIC is an important means for regulators to work together to design rules, but this is about generating a safe space for regulators to be sharing and learning before they even get to the point when they're thinking about the rules themselves. So what I would say here too is in an ideal world, this type of entity is actually built, housed, and run by the government itself, not necessarily by a startup 501c3. Until we get to that point, and I do hope in the US we actually do get to that point where we have the government actually building and running this type of laboratory for assessing and doing their own deep dive on implications of data and tech, Finrag Lab is setting out to be that resource. So the three components of Finrag Lab include primarily building the laboratory to actually undertake these data-driven tests. Regulatory engagement, that's clearly our mission is to be engaged with regulators and policymakers. From the beginning, what are the particular policy and regulatory topics that need to be further understood with concrete evidence? To keeping regulators and policymakers involved in the process is we're building the experiments and seeing initial outputs from the experiments all the way to the facilitated conversation, not just with the regulators, but importantly with all the stakeholders so that it is regulators, policymakers, industry, incumbents, fintech, non-banks, banks, and importantly consumer advocates, community advocates, and others sitting at the table and saying what do we make of the findings of this research? Part of our ability to do this work is going to be because we will be building partnerships and have started these with academic institutions to build the knowledge and the powerhouse behind actually running these experiments. We're going to be structuring this, leveraging academics, researchers who already have depth of knowledge in things like machine learning, building underwriting models. But also part of our ambition is to build out relationships with other entities that actually will take on their own research. And so Adair and I were having a good conversation yesterday about efforts that are already underway and how there may be opportunities for collaboration. So the lab, the priority there is to be able to perform multiple tests. This was some of the feedback we got from one of the federal regulators who's quite happy with what they're able to do by building, this is the no action letter, the CFPB where they can do one test with one of the fintech companies. But part of the enthusiasm that we were getting back for Finreg Lab is actually because we will be able to undertake multiple firms who participate in one experiment as well as potentially multiple experiments at the same time. The lab is also has legal counsel to help to make sure that we are providing the technical and the legal ability to engage fintech data providers, lenders, payments companies to actually perform these tests in a way that ensure levels of appropriate IP protection, data privacy and obviously making sure that PII information is not being shared. And then the ability to design and produce actionable insights are really trying to make sure that we are getting these tests underway and that they are responsive in terms of the time horizon that the policy makers have in light of what their agendas are. So how am I doing on time, Christy? I'm out, okay. Christy looks completely. All right, so let me quickly highlight just a couple of the areas then because I hope this actually simulates a little bit of time left we have to talk. Areas that we have identified as priority areas given the conversations we've been having with regulators include issues around alternative data for credit access, consumer lending, small business lending, happy to talk more about that. Areas and questions around the value of data portability and how data portability may actually be quite useful or not open question when it comes to personal financial management and consumer financial health. You've heard us talk about this, I'm happy to talk more but really important questions around the potential value of a lot of data that could be used for identity, authentication, identity proofing. So places there where we actually could be performing and I hope we will be performing tests to further understand the risks and the benefits there. And then broadly questions at the state level, insurance is a topic that has definitely come to our attention and potentially some opportunities for testing questions that would help to inform greater regulatory coordination among state regulators. And I'm happy to share the slides and would welcome follow-up conversation. So I am going to stop there because I will share the slides and my contact information. More steps here. Thanks everybody. All right, as I mentioned, we had one lightning round question that I had forced upon my co-panelists here because I simply love the quote to tee it up, which I'll give Tina a minute, but it considered a play on some of the lab discussions that Melissa's identified, some of the importance of the regulatory reporting information and efforts there. And then on Jaime's best day upper analogy, this is a quote from Anthony Haldane, his chief economist at the Bank of England from a 2014 speech that he gave. And this is literal when you hear the beginning, it's literally the way it starts out. I have a dream. It is futuristic but realistic. It involves a Star Trek chair and a bank of monitors. It would involve tracking the global flow of funds and close to real time. And much the same way as happens with global weather systems and global internet traffic. It's centerpiece would be a global map of financial flows, charting spillovers and correlations. And so my questions, and maybe we'll go in and this would our presentation is this Starship Enterprise conceivably from a regulatory supervisory standpoint is going to be fueled by the RegTech data that Scotty sends up to the engines. I think we've all noted this early days to see these types of things evolve in the different experiences that we've heard discussed here. But if I could get your views on what is the greatest enabler to get to this vision and what do you think is the greatest impediment right now towards evolving towards something this type of model? I don't have a great Star Trek analogy although I really did like the show and watched it growing up all the time. And I went to MIT and you basically nerded out to watch you bad like on a Friday night. So that's how you got a head fun. But for me, I think it was one of the greatest enablers is probably the fact that you can actually get some cost savings from using some of these applications and you can potentially do the job better, right? So you can save money and potentially do the job better so why not try it out? We've talked, as I mentioned, we talked to several different vendors. I mean vendors I think have their own angle but when we talked to the firms, a lot of them were trying things out on kind of a pilot basis initially and some of them gave us reports like, well, you know, the number of items that got flagged for review by kind of a human went down quite a bit but the number of issues that those flag results in other words, the false positives went down astronomically, right? So you'd have maybe instead of having a hundred things you had to look at you only had about 15 things you had to look at but 10 of those 15 things were real things that you had to vote resources to and so they actually were actually describing a situation where they actually had more people that they had to kind of hire to look at things because it was able to spot issues more quickly. I think some of the greatest impediments is really probably around governance and I think it's something both the regulators and the actual market participants really need to take a look at because a lot of times, especially with machine learning and you go to deep learning and all these different AI acronyms what you really have is a black box that kind of builds on itself and so what you need to be able to do is have testing around it to make sure that it's not going off track. You need to be able to have kind of protocols to like measure out what's going on, what information is actually going into the system as well and so I think that kind of care and attention to governance and the way the system set up is something both the firms need to really pay careful attention to but I think we as regulators need to do as well because most regulators that I think pretty much all of them really don't have the capabilities to go in and read the code and figure out what's right and what's wrong on any specific case scenario but they do have the ability to go in and figure out kind of what are the protocols. If something goes wrong, how quickly is it to be able to be caught and those are things I think that we need to pay attention to but that's something that's hard to do to be frank and I think that's one of the challenges we have to overcome. So I think the Bureau from the CPB's angle we take care to coordinate across regulatory agencies through our oversight work. I think that however coordination across agencies is really the answer to both of those. I think as you think about setting data standards or software standards for companies that have multiple regulators, coordination across agencies is gonna be really critical for any reg tech to be particularly effective. At the same time, coordination across agencies we're increasingly seeing regulators at panels like this and having these kinds of discussions so I am optimistic in that point. Also the CPB when we develop software in-house we are thinking often how can we share this? How do we share best practices? When we have software that we've developed iteratively with industry feedback for reporting requirements, it's open source and we wanna see other people using that. A lot of the tools we've developed are open source. We've used tools that we've required through enforcement actions and we've seen other regulators then use those tools as well and require them in their enforcement actions. So I think that's exciting. But I do think coordination across agencies and being mindful of that as we approach technology will be really important. I agree with all of that. And then I would say I think another piece or aspect of this that is challenging is that some of these reg tech companies basically have short term funding that doesn't actually have the long time horizon that's needed to actually sell into the incumbents. And I think that is a risk in terms of ultimately do the incumbents decide to build their own reg tech systems or they really out there acquiring what the technologies are that these startups are providing because that procurement process is quite long, quite lengthy. Great, thank you all very much and we have time for questions for lunch break. Sorry, I feel like you know what I'm gonna say but I'm gonna try anyway. In the process of being an academic I get to review articles for publication and I occasionally get articles from whether it's one of the US government agencies or the FCA is another one that I get articles where the research comes out of these. And it's hard to imagine that these are not policy biased by the administrations that are then governing the research because the scientific results and the interpretation of the results are sometimes disjoint. The same is true if I were to look at a research that perhaps a industry sponsored, right? We know there's lots of problems there. Now, put that side of me on one side, the other side, we clearly don't have enough academics anywhere near enough speaking to issues that are pressing and timely and we need them quickly. Yes, fair, fair. However, I think that going the other extreme and getting research that's produced, there's been a lot of conversation this week about some research that just came out that may not be scientific enough, that is worse than being naive, right? Bad knowledge is worse than no knowledge. So I'm just gonna leave it at, I'm urging, come to Berkeley, we'll talk, right? Go to these other places, engage, get help. I'm not trying to be judgmental against other research at just that, the academics, we try very hard to be scientific and to not have any policy ideas in our head when we're doing the research that's gonna speak to policy. And so please, please force engagement with us more, find more of us, we will help. Just going the path of saying ultimately it should be in the government I think is, it's too, the chance of it not being pure, anyway. Point heard. Hi, my name is Julia Volkovich. So I'm sort of the other extreme, you just heard of a very sort of academic perspective. I wanted to share and ask your insights about sort of a practical perspective. So I come from industry, I represent Ally Financial today but I also spent a decade in New York at JPMorgan Private Bank, at Citibank, at others, working somewhat on KYC, AML types of projects so in the compliance IT realm. Regardless, as part of that experience, I'm very well aware of potential platforms that want to be built, that are currently worked on to sort of establish identification, documentation, et cetera, storage for consumers to then provide to lenders, whether it's for a mortgage or for a car loan or for any other small business loan or whatever it else, to provide again, such a platform to help consumers for it to be easier for them to apply for such loans such as give their loan officer access to this system that has all their documents and have them look at it instead of providing it either individually to different lenders if they're asking for multiple loans or just again, sending via email, which could be not secure. What I was wondering is why don't the regulators, whether it's part of RegTech or it's a collaboration between FINRAW and CFPB and others, why don't they lead this initiative, potentially in collaboration also with industry, such as J.P. Morgan, who has such initiatives, et cetera, and it lead this with best practices in mind, with the consumer in mind, ensuring that you put in all of the regulation from the forefront, and most importantly for consumers, for them to know that there's the federal government in the background, so they feel safer providing their information to such a platform. Has this been considered? Insights about challenges, et cetera? Actually, could you, so you're talking about a platform for, oh, KFC, okay, then. So similar to KYC in terms of providing potential lenders, your information, your documentation, evidence of your credit worthiness, et cetera, but in one platform. So meaning, if it's CFPB that's the background, so there's a federal agency, you as a consumer feel safe about providing this information to the platform, but then you can provide any lender that, again, you're the one providing, so you feel safe about doing so, that access to that platform to collect the documents, to review them, to then potentially give you a quote or provide you the funds or whatever else. And I think this would be easier from every, it would be cheaper for consumers because in terms of time and effort, et cetera, it would be easier for the lenders because they can just access this one platform and have all the documents they need in terms for underwriting, et cetera. Like, again, I've heard this being debated for home loans specifically, but I think it's able to be applied to really any loan or any funds that are requested from a consumer point of view. I would just say we're interested in ideas like that. We're clearing house to kind of move ideas like that to the right markets folks in our bureau. I know we've done a lot of research about consumer shopping for loans and the amount of money that they can save when they compare prices. And I know that there are a number of tools in the FinTech space and even the bureau has a loan shopping tool as well that I could speak to. I don't have immediate thoughts on that idea, but we'd be happy to have more of a conversation in that space. So I was in London a couple of weeks ago at a REC Tech conference and there was somebody from Lithuania, the government in Lithuania and they actually, the government itself actually does collect and hold not just identity data for purposes that would on the financial side inform KYC but actually credit history, credit record data. It sounds radical, I think, in the US on the consumer side that the government would do that, but it's, I think things are changing rapidly and I think as Michael said earlier, there is widespread recognition that we need other ways that consumer data whether it's on identity and identity authentication or data with respect to information that may be used for your credit assessment. We need new ways of thinking about how that data is captured and held to the extent that we had been thinking about this at Treasury when I was there. It was less in contemplating you know, some type of data locker for purposes of credit history. We had been thinking about in the broader context of de-risking are there potential ways that in light of the fact that KYC is ultimately predicated on a federal issued ID that comes back to the social security number by a large that maybe there are new ways that industry ought to be thinking about that. With I think, I mean I'm not sure where this administration would be but with an interest in sort of having a conversation where industry may be coming up with new approaches that are safer that protect the information, consumer data information in the use for identity authentication purposes but to hear industry think about things like utilities but with the breaches that have been happening lately I think there's also rational but considerable concern about data, basically what I call honey pots of data sitting somewhere and so thinking about whether it's blockchain or other ways that distributed information can be gathered with consumer consent to share it for purposes of identity proofing or for purposes of data that would be used for underwriting. I think those kinds of ideas, as you heard are sort of interested, government is interested in it, industry is interested in it, we should be having deeper conversations about the pros and cons of those. Hello, my name is Steve Lindo, I'm a reformed banker and I teach a class on financial risk management at Columbia University. So I have a question for the panel about financial data standards and it's that knowing what you know now about the cost of building all of the financial regulations and enforcing them and the cost to the industry of complying with them, if you could get into a time machine and go back 15 years to the beginning of this cycle of regulation, would you argue for data standardization at that point and be able to claim that the cost over the long term of implementing data standards that were universal would be far less than the actual costs we've experienced of building and implementing the current set of regulations? I'll begin a response to that, but anyone from OFR and the audience that wants to amplify the importance of your question and data standards and if we could turn back the clock, I think absolutely yes. And again, explaining it's early days, particularly when you look post crisis at the amount of data, the way it's coming in and mechanisms for setting standards, particularly because we are dealing in many cases with players that are globally active. And so consideration of standards needs to occur realistically at an international level and to try and arrange some sort of harmonization. There are a couple of critical experiments that I think regulators are tracking and learning lessons learned from in terms of data capture, both with respect to OTC derivatives and some places where there were approaches that worked, but needed greater refining and sorting through those and then for other planned initiatives going forward where I think your point was taken in mind that people learn from experience and referring to forthcoming work on securities financing transactions to try and come up with common templates for regulators to be able to collect information so that there's a greater assurance that they're getting about the same needed information, the same quality of information that can then basically be plugged into Anthony Haldane's Star Trek enterprise. I think this is one of those questions when Joanne Tett yesterday was talking about the important thing sometimes being really boring that that's one of the challenges you have when you start peeling back discussions for data standards, but it's critically important. I don't know if there's anyone else from OFR who wants to add comments or not appreciatively on that or Mark, you've got the mic over there, but to see if any other panelists have perspectives on that. The only thing I'd add is working on a lot of international standard setting bodies when I was at the SEC before I joined FINRA is that it's really hard, right? This idea that data gets standardized, I mean, it sounds simple enough in theory, but it's actually really, really hard because there's different sources, there's different types of information people are looking to get from the data and there's also different interests. I remember when Dodd-Frank passed, we were trying to do some harmonization of regulations were adopting between us and the CFTC. That doesn't mean that's not a cop out to say it's really hard, but I think there needs to be a certain level of realization is what you can probably actually get out of Rectek and all those other tools is the data normalization, right? So even if upfront everything is not exactly matching up, you can actually build tools that potentially get you there and in some ways, I think that at times may be simpler than getting regulators from all over the world to kind of agree on a single set of standards. If I could just add to that, I agree with you that the quest for the Holy Grail of a single set of standards is very difficult to achieve, but what we should do, I think, is to continue to make efforts to try to standardize data as much as we possibly can. There are standards out there that are becoming more and more widely accepted and I think that there's a collective action problem to solve to get people to use them, particularly in the regulatory community. And frankly, the Europeans and those in Asia are way ahead of us on that score. And there are costs to all these things that industry has to bear, the regulators have to bear, but the question is what's the return on the investment upfront? And I think the benefits are considerable. We've demonstrated that over and over again. I think that what we should do where there are vague or where there are ambiguities or where there are questions about costs and benefits, that's where we need to get input from all the stakeholders involved and from industry, from consumer groups and others, because not all data need to be standardized. And we wanna make sure that we standardize those data for the right purpose and not blindly go in and say everything needs to be standardized because that's just not the case. I'll pile on here, Mark, for the OFR. If I could go back 15 years, I'm not sure that the first thing in my life I would change would be financial data standards, but it would certainly be near the top of the list. In fact, there was a group of us 15 years ago at the Office of Thrift Supervision who were working on risk data standards for the thrift industry. It obviously came to naught, the thrift industry is, or the OTS at least is gone. The process of standardization is painstaking iterative coordination work and the sooner you can get started, the better. I am Simone Franzi from the Global Forum on Resilience at Virginia Tech and interesting discussion on data. But I wanna go back to the previous discussion on regulatory coordination and it's really interesting to see that there is this kind of willingness in the future to coordinate among different regulators. I wanna take advantage of the fact that there is different regulator on the panel right now and ask basically simply what is the standard now for you to coordinate in the field of fintech? Do you coordinate regulations? Don't you, Al? Coordinate can be somewhat of a loaded term. It really depends on how you want to define it because you've got the US as an example where there's different regulators with different mandates. We've seen various aspects of coordination come forward in approaching some of the Dodd-Frank reform issues. And then if you layer on top of that, dealing with the European space with or without Britain, if you're looking at something global coordination, it may depend on exactly what you're talking about. What I can say is there is a tremendous amount of collaboration and knowledge sharing that's going on amongst standard setters within each country. And then there's a number of global forums where this is happening. And again, you've got banking, if you look across the different sectors, there's international organizations, international standard setting bodies for the main sectors in terms of banking, securities and commodities markets and insurance. These are also guided and being promoted at a collective level under the auspices of the Financial Stability Board that a number of the US regulators participate in. So I'd say there's a big umbrella and framework that's happening multilaterally. And then I think Fenra and others have talked about on a bilateral basis, sometimes it may be easier to manage the dialogue and arrive at smaller problems to tackle with a greater degree of success. And I don't know if either of you wanna talk a little about what you've been seeing in terms of elaborating more on international coordination issues from the activities that you've had. Just maybe Ekka, what we talked about before, one of the key features of our Innovation Outreach Initiative is to try to coordinate on Fintech, both domestically with regulators here in the US and with international regulators. And just to give you a couple of examples, we have quarterly calls with the folks at ESMA that deal this area. We have very frequent calls with the folks at the UK, FCA, we have coordinating calls. We actually have meetings with myself and some of the heads of the Fintech groups at the OCC, the CFTC and the SEC on an informed basis every month, we started that up. So it's definitely, I think we recognize that's a priority both in terms of just gaining additional knowledge because they're seeing things that we don't necessarily see and vice versa. But also thinking about ways where we wanna take a certain approach, at least talking about the approach that we're thinking about taking. Sorry, go ahead. Oliver Goodnub here from the Vermont Law School. In the conversations around reg tech that I've had with folks in the private sector recently, there's been a lot of, one of the themes I'm often hearing is building the regulatory boundaries and reporting mechanisms directly into the kind of workflow and management software that many enterprises have. So in fact, importing into their existing enterprise software, a reg tech compliance layer. But I'm not hearing much of that so far, at least from the panel, and I'm just wondering if you would comment on if that's something you're hearing and what your thoughts might be in that direction. So are you talking about basically regulators being a point on a distributed ledger node or getting capital computations in real time through risk reporting or? That could be examples, I mean the examples are all over the place, once you start to think about it, that the internal reporting and management processes produced by the enterprise software, A, could be bounded by regulatory structures and B, could be either directly linked or quickly linked into a reporting kind of capacity. What I most recently have seen are some of the large institutions themselves working together to create the ability to, particularly when it comes to managing third-party vendors, to have their own capacity, their own functional utility, if you will, true site as one of them that was just announced this week, where together they are using one entity that is ensuring that any third-party vendor they use is compliant with the regulations. And so I see that as a step towards integrating and bringing in house, ultimately their ability to more effectively and more consistently have vendor compliance around using some of the non-bank services that they're using. So I see it as more of an evolution than, I mean we should have somebody actually from the banking sector talk about what they're doing in house, but that's what I've been watching. In the ball thing, Amira, you had talked about identity management and companies like Civic perhaps that are allowing you to provide access whether through blockchain technology or similar. There's something that's related, which is given the paradise papers, ultimate beneficial ownership. How do you see something like that coming to fruition? Of course the technology is there, but that's largely given it's a global process, global organizations and an opt-in process. How do you see something like ultimate beneficial ownership occurring over the next several years? So I actually don't see it occurring over the next several years. I mean at least not the next couple of years, maybe more long-term, but I do think it offers a platform where you can potentially make it happen, right? So all these different reg tech areas we're talking about, they're tools. They don't solve all the problems. And really a lot of the things you're talking about in terms of beneficial ownership, it's really, sometimes it's the actual national legislation that's involved in terms of what you're actually required to find out. And it's not gonna solve those types of things. What it will potentially solve is potentially give people more trust within the system potentially if they feel like that that system can manage their information better. So if they're doing it on a voluntary basis, they'll be more likely to participate in such a system. And also potentially allow less leakage of the information or at least more control on the part of the investor about how their data is actually used in the process. I think incremental progress is the right way to go because you will still have, there's still a fair amount of divergence in different jurisdictions approaches to data and data protection, which will invoke concerns about sovereignty plus, as Melissa was mentioning, it's a double-edged sword with, you have the benefits of fentech and regtech, but needing to build robust systems that where the trust doesn't get eroded by the potential for cyber attacks, it's gonna be an iterative process. You might have solutions over time that arise and then they're ostensibly for different types of needs, whether it's financial crime investigations or for those types of regulatory approaches, there are bridges and information sharing arrangements, but I think it will probably be a long time before something on the front end for the business utilization that you'd see a global model evolve. I have been told last question because lunch is ready. So if anybody wants to jump into that gap. I guess that's me. Is this on? Yes. I wanted to ask you a much more global question, literally and figuratively, which is in the last financial crisis, this trillions of top derivatives, which nobody understood was the overhang, one of the major causes of the crisis. And I'm wondering, and this is not just for the panel probably, but do we have the powers to regulate those things that are more effective than they were 10 years ago? To monitor them, to regulate them, where do those powers exist? Do we have the tools to monitor and regulate and is reg tech developing in ways that could help in that process? Take a quick stab. They're part of the outcomes of the international collaboration coming out of the past crisis was to try and enhance surveillance of things that may fall outside the statutory regulatory perimeters set by in the financial regulatory system. There is a term of art, which is not favored by everyone, but it's a common vernacular, the shadow banking system, and there are tools and mechanisms that have developed under the auspices of the financial stability board and its constituent members, which includes US regulatory authorities on how to surveil for these types of things and to there be stock taking and information to see if regulatory perimeters need to be adjusted or not in light of some of the developments. The issues that have arrived about, which I'll call the tech fin, the players that may be outside the regular and commonly recognized systems, that that's an area that will be undergoing no surveillance. And I do commend for you, for example, the background on the Basel committee paper, which sort of describes what the impact of some of those entities that may be outside of the remit or current purview and the impact they could have on one's inside. So I'd say there has been thought given and framework developed for people to approach thinking about those in a more comprehensive fashion. And that's the developments that we've been talking about the last couple of days are falling into those areas of consideration. I just wanted to add to what Elizabeth said. Yes, first of all, Title VII and Dodd-Frank really addresses these, and Title VIII, you will also see the designation of financial market utilities who are charged to clear swaps in other derivatives. And the Council, the Financial Stability Oversight Council, has designated eight financial market utilities for oversight and prudential supervision. For that, the question you raised, though, about can REG Tech facilitate this is a good one, because Title VII also requires that transactions be reported from swap data repositories, and the way that was done and implemented needed some work. So we've been working with CFTC and SEC on this for several years, and they are revising the way that they go about collecting the data that were required to be reported under Title VII. The promise of FinTech and REG Tech, especially through distributed ledger technology, is twofold. One is potentially to reduce the risk that resides in CCPs by narrowing the window, as we've done in other kinds of transactions, of risk and speeding up the settlement, the payment clearing and settlement process can reduce that risk. And the second thing is that it can also help realize the promise that swap data repositories are gonna be low-cost, high-quality data collection points and make the data more comprehensive. But in this process, I would argue that still data standards are needed in the way that regulators need to go about collecting the data and specifically what they require, that requires thought and human intervention. REG Tech won't solve that. And with that, can we acknowledge our panelists, please?