New York’s Financial Regulator Puts Focus on Crypto Firms for Digital Reporting Initiative
New York’s Financial Regulator Puts Focus on Crypto Firms for Digital Reporting Initiative
The New York Department of Financial Services (NYDFS) is seeking ways to digitize financial reporting in a new tech initiative that will initially focus on cryptocurrency companies.
- NYDFS Superintendent Linda A. Lacewell announced the department’s first-ever “TechSprint” collaborative initiative in a press statement on Thursday.
- The initiative seeks solutions for digital reporting that would give the regulator “instant access” to data from firms under its supervision.
- “The future of financial supervision is digital and needs to happen now,” according to Lacewell.
- DFS is making “progress towards automating the reporting” of financial data via the department’s regulated entities, she said.
- The move comes amid a growing trend by financial regulators around the globe to employ “TechSprints” as a tool to prototype technical solutions to regulatory issues, per the announcement.
- “Virtual currency companies” were chosen first for the New York scheme due to their “advanced digital capabilities.”
- NYDFS also notes that, given that legacy reporting formats are often slow, periodic and laborious, data quality issues arise.
- The department will collaborate with the Conference of State Bank Supervisors, an organization of state financial regulators, and the Alliance for Innovative Regulation to launch the TechSprint.
- Over a number of days, fintech professionals, regulators and experts working on regulatory compliance solutions will come together to propose solutions.
- Those solutions could range from improvements to processes through to a functioning prototype of a reporting mechanism.
- The end result will see a set of common standards hammered out to be provided in an open-source technical framework and later adopted by the DFS and potentially other regulators.
- Design workshops are slated for the fourth financial quarter of this year with the TechSprint expected to occur in early 2021.
