In the near future, banking regulations are expected to evolve in response to numerous factors, including those of technological advancements.
FREMONT, CA: Regulations can be considered as the monitoring mirror of all the disruption an industry faces. The banking sector has been encountering a lot of regulatory churns lately. This comes as a response to all the new technologies finding their way into financial institutions. The trend of technology adoption is expected to continue over the upcoming period. This will result in further changes to the regulatory framework. To minimize the impact of continually changing regulations, banking companies need to prepare well in advance. Readiness helps banks effortlessly adapt to changing regulatory landscapes and negate any long-term effects on profitability or productivity. Some of the factors that will impact banking regulations in the near future are listed in this article.
Cryptocurrencies
Cryptocurrencies are expected to drive a number of regulatory changes for the banking sector. There has been a gradual rise in the acceptance and popularity of cryptocurrencies. The emergence of fintech companies has contributed to the ongoing cryptocurrencies revolution. Owing to the distinct nature of these digital currencies, banks dealing in them will be exposed to a new set of regulations.
Artificial Intelligence
The intelligence of machines is on the rise owing to the rapid developments in
artificial intelligence. As the cognitive and learning powers of computers and robots grow, they are bound to attract regulatory scrutiny. Banks have a lot of scope in using AI. This means banking regulations will advance in tandem with the level of AI-adoption by banks.
Data Privacy
Banking regulations have always focused majorly on the confidentiality of data. In the era of connectivity and digitalization, reinforcing data privacy has become exceedingly important. With technologies like IoT and cloud computing, customer data has become vulnerable to cyber threats. This has been driving regulatory bodies to adopt stringent security compliance measures, which will continue over the next few years.
By taking cognizance of these potential areas of regulation, banks can effectively manage areas of concern and ace compliance.
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