Publication type: Article in scientific journal
Type of review: Peer review (publication)
Title: An innovative RegTech approach to financial risk monitoring and supervisory reporting
Authors: Kavassalis, Petros
Stieber, Harald
Breymann, Wolfgang
Saxton, Keith
Gross, Francis Joseph
DOI: 10.1108/JRF-07-2017-0111
Published in: Journal of Risk Finance
Volume(Issue): 19
Issue: 1
Page(s): 39
Pages to: 55
Issue Date: 2018
Publisher / Ed. Institution: Emerald
ISSN: 1526-5943
2331-2947
Language: English
Subjects: Smart contracts; Algorithmic standards; Document engineering; RegTech
Subject (DDC): 005: Computer programming, programs and data
Abstract: Purpose: The purpose of this study is to propose a bearer service, which generates and maintains a “digital doppelgänger” for every financial contract in the form of a dynamic transaction document that is a standardised “data facility” automatically making important contract data from the transaction counterparties available to relevant authorities mandated by law to request and process such data. This would be achieved by sharing certain elements of the dynamic transaction document on a bearer service, based on a federation of distribution ledgers; such a quasi-simultaneous sharing of risk data becomes possible because the dynamic transaction document maintain a record of state in semi-real time, and this state can be verified by anybody with access to the distribution ledgers, also in semi-real time. Design/methodology/approach: In this paper, the authors propose a novel, regular technology(RegTech) cum automated legal text approach for financial transaction as well as financial risk reporting that is based on cutting-edge distributed computing and decentralised data management technologies such as distributed ledger, distributed storage, algorithmic financial contract standards, automated legal text and document engineering methods and techniques. This approach is equally inspired by the concept of the “bearer service” and its capacity to span over existing and future technological systems and substrates. Findings: The result is a transformation of supervisors’capacity to monitor risk in thefinancial systembased on data which preserve informational content offinancial instruments at the most granular level, incombination with a mathematically robust time stamping approach using blockchain technology. Practical implications: The RegTech approach has the potential to contain operational risk linked toinadequate handling of risk data and to rein in compliance cost of supervisory reporting.
URI: https://digitalcollection.zhaw.ch/handle/11475/15742
Fulltext version: Published version
License (according to publishing contract): Licence according to publishing contract
Departement: School of Engineering
Organisational Unit: Institute of Data Analysis and Process Design (IDP)
Appears in collections:Publikationen School of Engineering

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Kavassalis, P., Stieber, H., Breymann, W., Saxton, K., & Gross, F. J. (2018). An innovative RegTech approach to financial risk monitoring and supervisory reporting. Journal of Risk Finance, 19(1), 39–55. https://doi.org/10.1108/JRF-07-2017-0111
Kavassalis, P. et al. (2018) ‘An innovative RegTech approach to financial risk monitoring and supervisory reporting’, Journal of Risk Finance, 19(1), pp. 39–55. Available at: https://doi.org/10.1108/JRF-07-2017-0111.
P. Kavassalis, H. Stieber, W. Breymann, K. Saxton, and F. J. Gross, “An innovative RegTech approach to financial risk monitoring and supervisory reporting,” Journal of Risk Finance, vol. 19, no. 1, pp. 39–55, 2018, doi: 10.1108/JRF-07-2017-0111.
KAVASSALIS, Petros, Harald STIEBER, Wolfgang BREYMANN, Keith SAXTON und Francis Joseph GROSS, 2018. An innovative RegTech approach to financial risk monitoring and supervisory reporting. Journal of Risk Finance. 2018. Bd. 19, Nr. 1, S. 39–55. DOI 10.1108/JRF-07-2017-0111
Kavassalis, Petros, Harald Stieber, Wolfgang Breymann, Keith Saxton, and Francis Joseph Gross. 2018. “An Innovative RegTech Approach to Financial Risk Monitoring and Supervisory Reporting.” Journal of Risk Finance 19 (1): 39–55. https://doi.org/10.1108/JRF-07-2017-0111.
Kavassalis, Petros, et al. “An Innovative RegTech Approach to Financial Risk Monitoring and Supervisory Reporting.” Journal of Risk Finance, vol. 19, no. 1, 2018, pp. 39–55, https://doi.org/10.1108/JRF-07-2017-0111.


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