The UK and New York financial services regulators will share staff through a secondment program starting next month.
The New York Department of Financial Services and the Bank of England will share insights, knowledge and experience on emerging financial services and technologies.
The Transatlantic Regulatory Exchange program, as it is known, begins with the exchange of emerging payment platforms and digital asset experts.
The secondment period is at least 6 months, but can be extended up to 1 year.
“Bringing together the two global financial capitals of New York and London is critical to harmonizing regulations in a world where financial services are not geographically defined,” said New York State Regulatory Authority Superintendent Adrian Harris. There is,” he said.
Participants will return to their home regulators and are expected to “apply enhanced insight, knowledge and experience to the regulation of emerging financial services and technologies,” according to the New York Department of Financial Services.
Jean-Louis Blavard, former managing director and interim CIO of JPMorgan, said the program will take organizations beyond just sharing notes.
“I think this is a great idea because it’s essentially a 3D view of sharing notes about an issue, rather than a 2D approach,” he told Computer Weekly. “In terms of methodology, I think the two regulators are quite different, but in terms of tools, I don’t think they are.”
Bravard, who also spent time in the IT outsourcing sector, added that the exchange of knowledge and skills can help organizations bridge the gap without outsourcing. He said the people working at both organizations were very trustworthy and it was a safe way to access a range of skills.
Cross-border cooperation by regulatory authorities also contributes to global markets. Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, said: “By sharing knowledge and learning from each other, we can ensure that regulation better supports global financial stability and safe innovation in payments and financial markets.” said.
Connecting the two world financial capitals of New York and London is key to harmonizing regulation in a world where financial services are not geographically defined
Adrian Harris, New York State Department of Financial Services
Chris Skinner, CEO of The Financier and industry commentator, called it a “win-win” for both organizations.
“This is an interesting development as the US and UK see themselves as leaders in the development and regulation of financial technology startups and markets,” he said. “The US can bring insight into how big tech companies think and stand on digital assets. The UK can bring access to a world-leading fintech center with a cutting-edge start-up community.”
David Bannister, an analyst at capital markets consultancy GracePark Partners, said the U.S. is far behind the U.K. in terms of payment platforms, given the first planned exchanges around emerging payments and digital assets. He said that there is a possibility of learning.
“The U.S. payment system is still stuck in the past, and it’s only in recent years that the separation of electronic payments and checks has finally favored electronic payments.”
He added that international cooperation is essential when it comes to digital assets, an emerging area of expertise.
This cooperation will inevitably extend to other financial areas where advanced technology is used. With the use of artificial intelligence (AI) in the banking industry rapidly increasing and under constant threat from cybercriminals, keeping up with the technology is a constant challenge for regulators.
One senior IT executive in the UK banking sector told Computer Weekly that AI is likely to cause the next big banking scandal. “All these scandals, like subprime loans and PPI, happened because the banks pushed something too hard and they failed,” he said. “Then they have to cancel and pay. This is the lifecycle of how banks operate, and next is AI.”
Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.