Video by FINOS via YouTube
Former acting U.S. Comptroller of the Currency Michael Hsu joins FINOS Chief Data Officer Jane Gavronsky to announce the official relaunch of the Open RegTech initiative. Michael breaks down the systemic friction of analog banking compliance, demonstrating how regulators and global institutions can eliminate duplicate legal interpretations by issuing machine-readable regulations backed by open standards.
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🕒 Timestamps:
0:00 Introduction: Relaunching Open RegTech at FINOS
0:58 Mutualizing Non-Competitive Regulatory Workflows
1:50 Michael Hsu Keynote: The Analog Regulation Problem
2:58 Deconstructing the Regulatory Stack: Intent, Spec, and Duplication
4:40 Proving the Concept: How CDM and DRR Transformed Derivatives Reporting
5:50 The Paradigm Shift: Regulators Issuing Regulation as Code
6:20 Three Tailwinds Accelerating Regulation as Code: Streamlining, Proven CDM, and AI
7:28 From Prose to Code: Completing the Machine-Readable Stack
8:35 Vibe Coding Rules: Using AI to Accelerate Regulatory Prototyping
9:46 Widening the Scope: Expanding Past Derivatives to Liquidity, BSA, and AML
10:50 Pilot Priorities: Riding the Streamlining Wave and Targeting 2052-A Reports
11:59 Default to Machine Readable: Replacing "Cassette Tape" PDF Regulations
12:70 Call to Action: Pick a Spot, Build on CDM, and Join the Open RegTech SIG
📊 The Problem: The High Economic Cost of Analog PDF Regulation
For decades, financial regulation has operated as a slow, analog assembly line: regulatory agencies draft rules in text documents, publish them as static PDFs, and hand them off to banks. At individual institutions, armies of lawyers, risk officers, and consultants manually read, interpret, and convert those PDFs into custom data schemas, rule logic, and reporting scripts. This constant duplication across thousands of firms burns immense capital, slows innovation, and creates massive operational risk due to inconsistent legal interpretations.
🏗️ The Solution: The Open RegTech Shared Regulatory Stack
Michael Hsu lays out a roadmap to modernize regulatory compliance using open source and AI:
Common Domain Model (CDM) Foundation: Utilizing an open-source, industry-standard data schema so financial trades, transactions, and reporting fields share a single digital definition across firms.
Digital Regulatory Reporting (DRR) Logic: Standardizing rule execution logic (via projects like ISDA’s DRR) to eliminate duplicate firm-by-firm interpretation layers.
Regulation as Code: Encouraging regulators to issue new rules natively as machine-readable code alongside prose text, enabling financial institutions to plug regulatory logic straight into compliance engines.
⚙️ Why This Matters for Financial Engineering
AI-Accelerated Modernization: Leveraging generative AI to rapidly translate legacy regulatory text into structured, machine-readable specifications and rule logic.
Targeting High-Friction Reports: Expanding machine-readable frameworks past derivatives reporting into massive, daily regulatory filings like U.S. 2052a liquidity reports, U.K. PRA 110 reports, and BSA/AML compliance.
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