The Future of Money Through the Lens of Compliance

Adam Johnston, Managing Director Protiviti Hong Kong

Key takeaways:

  • The future of banking — and banking regulation — is digital and AI-driven.
  • Risks will increase, especially around crypto, fraud and bias in machine-made decisions.
  • Upskilling of compliance officers and risk professionals is needed to function in this evolving environment and manage new risks.

Go deeper:

Recently, I had the opportunity to interview HSBC’s chief compliance officer for Asia-Pacific, Darren Furnarello, on the VISION by Protiviti platform. (VISION by Protiviti is a website exploring big topics and megatrends, helping businesses prepare for what’s ahead.) My conversation with Darren was on the future of money — a theme VISION by Protiviti will be exploring for the next several months — but I specifically wanted to know, what does that future look like from the perspective of a compliance officer for one of the biggest global banks? I’ll summarize my takeaways here, but I invite you to read the interview for yourself for your own personal insights.

Banking priorities

In terms of priorities at the moment, Darren says his focus is squarely on meeting his extensive compliance obligations, adapting a global framework to regional variations and nuance. Scanning the horizon for new risks is part of that obligation, and he had compelling examples of risks that have emerged in the past couple of years — both geopolitical and economic.

Operational resilience is another point of focus, covering anything from cybercrime to money laundering and data privacy. Yet another is climate resilience and green financing — an issue increasingly demanding the attention of compliance officers as the ESG regulatory landscape takes shape.

Focusing on the more immediate future, digitization looms big for compliance officers, affecting — or driven by — a number of factors, from customer experience to regtech, open banking and artificial intelligence. Using the latest technologies should be purposeful and strategic — it should respond to both customer and regulatory demands, with data security and privacy front and center.

“I think as [AI and machine learning] progress and become more mainstream, regulators will be looking to address some of the pretty big open questions out there around the ethical implications of some of the algorithms and all the potential biases in these algorithms.”

— Darren Furnarello, Chief Compliance Officer, Asia-Pacific, HSBC

What keeps compliance officers awake at night?

For Darren, it’s a future where unregulated cryptocurrencies and digital assets mingle with traditional banking assets, and where the potential for fraud and financial crime goes up. “I think there needs to be significant advancement around how that is regulated, but also significant upskilling, which we need to do from staff, from our own internal operations, to be able to effectively manage these new potential risks that will come through all of these digital platforms, because people are moving away from more traditional banking,” he says.

My full interview with Darren is available on the VISION by Protiviti site, where he also shares six things executives and directors can do now to prepare for the regulatory future.

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