Towards an endogenous regulation - with AI and Blockchain

When I concluded my final project report for the Warwick Business School Executive MBA last year, one of the summary points was that financial services regulators would soon need to start looking at'technology as law' and would need to write laws and policies to govern this change. Regulations would become endogenous rather than reactive as they are today. While this may look like something for the future, both regulators and member banks could find efficiencies in the near term by leveraging the advancements in technologies of both artificial intelligence and blockchain. In this blog, we will explore how much money is spent by large financial institutions in keeping up with the ever changing regulatory landscape, how smaller enterprises are carrying risks of penalties due to their inability to catch-up with the regulations and how regulators continue to have the dilemma on what's the right level of regulations. Using examples of GDPR and MIFID II, we will see what are the current challenges faced by these enterprises and how we can apply a combination of AI and blockchain to seek efficiencies and start moving towards'pro-active' regulation and maybe one day to endogenous regulations!