Wednesday, November 18, 2020
OneSpan executives Michael Magrath, director, global regulations and standards, and Gabrielle Rosas, strategy and global regulatory researcher, provide an overview of regulatory initiatives in the report. The co-authors observed that regulators around the world have modeled their approaches to onboarding and e-signatures on Digital Identity Guidance, published in March 2020 by the Financial Action Task Force (FATF).
"FATF is an international organization made up of government regulators whose sole purpose is to combat money laundering and terrorist financing," Magrath said. "The U.S. Treasury Department is the U.S. representative. Creating digital identity guidelines was a two-year project that came to fruition in March of this year. It's actually a very good, comprehensive document."
In an interview with The Green Sheet, Magrath described sweeping regulatory changes, brought about by COVID-19 and designed to protect digital transactions and commerce. These measures are pushing traditional financial institutions to acquire and deploy leading edge technologies to comply with social distancing requirements, he stated.
"We scanned the globe to identify recent regulations, legislation, and policies that impact banks and other financial institutions, specifically in the areas of privacy, cybersecurity, anti-money laundering, know your customer, digital identity, authentication, and electronic signatures," Magrath and Rosas wrote in their report's introductory statement. "This report is not an inventory of all regulations. It is concentrated on those enacted during 2019 and 2020, or that will take effect in 2021 and 2022."
In addition, the report cited the following trends:
In light of these swift responses to changing consumer and business environments, OneSpan researchers expect to see more data privacy and data protection laws enacted across the globe. Magrath and Rosas pointed out that financial services had been migrating to digital platforms even before the pandemic. COVID-19, however, exposed systemic weaknesses in data privacy and data protection in regions where digital transformation has been slow.
"As a result, we will continue to see more data privacy and data protection laws enacted throughout the world," researchers wrote. "Each will bring unique regulatory requirements for financial institutions. Additionally, open banking will become the norm throughout the industrialized world, as will e-KYC and remote customer onboarding."
Scott Clements, OneSpan CEO, agreed that the pandemic has drastically altered the financial services landscape. "The COVID-19 pandemic has presented financial institutions with major economic and operational challenges and accelerated the need for digital transformation at the same time as the industry grapples with an increasingly complex global regulatory environment," he said. "OneSpan’s inaugural Global Financial Regulations Report will arm banks and financial institutions with information they need to both be compliant and sustain their competitive position."
The report is available at onespan.com/resources/onespan-global-financial-regulations-report .
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