New regulation will fundamentally change the landscape for the biggest tech companies – especially cloud providers – according to a new paper from JWG, the London-based think tank that tracks and analyzes financial services regulation.
“Managing Digital Infrastructure Risk: A Collaborative Path to Financial Services Safety,” is available online at JWG. His analysis, based on 287,897 pages of new regulations in 2022 alone, is a wake-up call for companies that need to define “what looks good” before massive fines are imposed.
The company uses a natural language processor to sift through the regulations. “We’ve modeled all of the terms that we know regulators are talking about and we’re looking for issues that we don’t understand and trying to get a sense of how it all fits together,” Di Giamarino said.
New regulations will cover information and communication technology (ICT) risk management, third party risk management strategy, scenario planning, operational resilience and technology governance. And of course the requirements in the EU, UK and US, not to mention Asia, will be slightly different.
It’s getting very complicated, said PJ Di Giamarino, CEO of JWG. “We already have a big divide between Asia, the US and Europe. Europe is customer-centric and regulates to protect individuals. The US protects business and the right to do business with a little protection for the people, and China is all about state rights.”
This could add a whole new level of complexity and cost, he added.
“To sum up, the last 18 years of Reg activity has been about who is trading what. What’s happening here is a whole different conversation – HOW? It’s everywhere today, small pieces of emotion that nibble on the HOW. If you don’t do it top-down, you’re going to die from many, many paper cuts and fines.
Francis Gross, senior adviser to the European Central Bank, said the industry must act quickly. “There is a sense that industry and regulators need to learn quickly and collectively what technology is best for competition and what is best for collective action, beyond today’s silos,” he said in a personal capacity.