Region’s First RegTech Event Hosted by the Dubai Financial Services Authority and Dubai International Financial Centre | DFSA

Starling Team

On June 2cd and June 3rd, The Dubai Financial Services Authority (DFSA) and The Dubai International Financial Centre Authority (DIFCA) held the first edition of a Regulatory Technology (RegTech) event, ‘RegTech Live’.  The event drew over 600 attendees in the financial sector and centered on the theme of Driving Compliance through Innovation.

This global event included keynote speeches, panel discussions, and demonstrations from experts on the digitalisation of compliance, onboarding processes, transaction monitoring, and broader regulatory compliance.   Bryan Stirewalt, Chief Executive of the DFSA, said: “The digitalisation of the compliance function is key to the future of finance and this can only happen effectively with engagement from public and private sectors.  This event brought awareness for all stakeholders, including regulators, on understanding the available and emerging regulation technologies and the risks and opportunities they present to clients, markets, and overall financial stability.  This event played a key role in raising awareness about the use of technology in the delivery of financial services and maintaining regulatory compliance.”  

Arif Amiri, Chief Executive Officer of DIFC Authority, also commented: “The event demonstrated how the financial services sector is adapting and making use of technology to drive innovation, deliver compliance solutions and help build a more robust regulatory environment.”

In 2017, Starling was invited to participate in the Dubai International Financial Center’s “DIFC Hive” FinTech and RegTech accelerator.  You can learn more about the insights uncovered during DIFC Hive here.

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The Human Network | City Journal

Starling Team

Can you “catch” behavior in the same way you would catch a virus?  In 2013, social scientists Rose McDermott, James Fowler, and  Starling advisor Nicholas Christakis published an article titled Breaking Up Is Hard to Do, Unless Everyone Else Is.  This article explored how social phenomena spread.  What they found was that humans, as social animals, are linked and influence each other’s behavior.

For example, they found that men and women with divorced parents are more likely to get a divorce themselves.  The divorce “bug” can easily move across entire networks of people, in part because human networks are not random.  A 2007 paper found that the same is true for obesity.  People who are obese, like divorcées, appear in clusters.

Why is this the case? Our social networks play a significant role in our behavior.  We connect with people who are similar to us in some way.  When an event happens in one person’s life, it can “go viral” and impact the rest of their network.  While our thoughts, beliefs, and decisions may feel unique to each individual, they have a collective life.

The good news is that this phenomenon does not have to be negative.  They can also lead to positive changes in individuals or culture shifts inside organizations.  Policymakers and regulators can mine some insight from social-network theory to understand human behavior and inspire change. 

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Institutional Innovation Report | Aspen Digital

Starling Team
Aspen Digital recently released a new report, Redefining the Workscape Bringing Value and Values to Machine-Human Collaboration.  The report summarizes a two-day Roundtable discussion in which Starling founder & CEO Stephen Scott participated last summer. It features discussions on the future of work, with a focus on business structures and leadership strategies that can help organizations leverage the opportunities presented by new technologies.

As Stephen emphasized during the Aspen Roundtable discussion, “networks of trust” within an organization work to cultivate a sense of belonging and community, to foster camaraderie and collaboration, and to engage people in a shared sense of purpose and a common corporate culture.  Such trust networks are an over-looked and critical company asset.

Rather than the current reliance upon complex technology-based risk management systems that operate at multiple “layers of defense” across broad geographies and distributed teams, Starling emphasizes that behavioral science, organizational network analytics and machine learning combine to allow managers to map and measure the “social capital” at work in their firms, and to harness that to serve improved performance and risk management goals.

To learn more about these and other ideas explored by the distinguished Aspen Digital Roundtable participants, download the full report here.
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Banks’ Remote Working Increases Operational Risks but Could Continue: HK Regulator | Thomson Reuters

Starling Team

According to Ashley Alder, chief executive of Hong Kong’s Securities and Futures Commission, the remote working policies put in place due to the Coronavirus outbreak pose operational risks for financial institutions. During lockdowns, the regulators relaxed rules and allowed staff at financial institutions to work from home. Now, banks and regulators are reviewing the practices that they put in place as they consider returning to work in the office.

“Some of the technology infrastructure isn’t particularly well adapted to working from home… no doubt that there is an increase in operational risk, notwithstanding the fact that it has gone well so far,” said Alder. He also said that regulators may allow these arrangements to continue, even after the pandemic is over. “Working from home, with a degree of flexibility from regulators, went far better than we people would have thought. We do think that many of those operational accommodations may continue.”

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Whistleblower Reports to FCA on ‘Unacceptable’ Workplace Culture Spike in 2019 | Financial News

Starling Team
Whistleblower reports to the Financial Conduct Authority on ‘unacceptable’ workplace culture increased by 35% in 2019. This increase in reports could be due to the growing awareness of unacceptable business practices. “Over the last couple of years, organisational culture has become an increasingly important part of the risk landscape for firms,” consultancy Kroll reports.

Questions regarding ‘fitness and propriety’ — which relates to an individual’s honesty, competence and financial soundness — made up the most commonly reported problem, with 442 such cases. Systems and controls and compliance matters were also common problems, with close to 400 reports each.

“If toxic internal issues hit the headlines, the repercussions on both reputation and the bottom line can be catastrophic. To avoid being associated with such risks, organisations are adding ‘culture checks’ to their corporate due diligence processes,” Kroll observed.

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