Tag: Regulatory Ramblings

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Regulatory Ramblings

Regulatory Ramblings: Episode 60 – The Evolution of Fintech: Asia, The US and the Implications for Inclusion with Theodora Lau

Based in the US, Theodora Lau, or Theo, as she’s known, is Hong Kong-born and bred and the founder of Unconventional Ventures. Her firm’s mission is to develop and grow an ecosystem of financial institutions, corporations, startups, entrepreneurs, venture capitalists, and accelerators to improve banking and meet the often-unmet needs of consumers, including older adults and women. Theo’s mission is to connect founders with funders, specifically underrepresented entrepreneurs.

She regularly mentors and advises startups in financial services and healthcare/caregiving as part of her work. She is also an advisor to B21 Ventures, which focuses on entrepreneurs disrupting finance and health through artificial intelligence.

Theo has been referred to by the American Banker as one of the “Most Influential Women in FinTech” and is one of few global experts providing authoritative insights on both the US vis a vis Asia.
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Besides being a best-selling author, Theo is an accomplished technologist and is much sought after for her unique insights on the success of super apps in Asia, the evolution of AI, and the disparity in digital adoption between regions. She is also a public speaker, writer, and advisor who seeks to spark innovation in the public and private sectors to benefit forgotten demographics and create a more inclusive society.

Theo regularly discusses AI, gender equity, FinTech, inclusion, and longevity. She is a guest contributor for various top industry events, publications, and podcasts, including Fintech Futures, the American Banker, BBC, the Journal of Digital Banking, Harvard Business Review, Nikkei Asia, MIT Tech Review, Money20/20, Finovate, RISE, FinTech Week Hong Kong, Breaking Banks, Irish Tech News, and the Forbes Technology Council.

She is the co-author of “Beyond Good: How Technology is Leading a Purpose-Driven Business Revolution” and co-author of “The Metaverse Economy” (both books are now available in paperback editions). Theo is also the host of One Vision, a podcast on innovation and fintech, and runs a weekly LinkedIn newsletter called FinTech Prose on emerging technologies (such as voice-activated/enabled software and AI), inclusion, longevity, fintech, innovation, and using technology for good. Her monthly column on Fintech Futures explores the intersection of FinTech and humanity.

She holds a Bachelor of Science degree in chemical engineering from Rensselaer Polytechnic Institute (RPI) in New York and a Master of Science in project management from George Washington University in Washington, DC.

In this episode of Regulatory Ramblings, Theo provides listeners with an in-depth look at the evolving fintech landscape and its regulatory challenges. A common thread in her discussion with our host, Ajay Shamdasani, is the seeming chasm in digital adoption between Asia and the US.

Theo talks about growing up in Hong Kong, eventually heading to the States for education, and her impressions two-plus decades later as having been fortunate enough to have a catbird seat at the beginning of the modern age of digital finance. ​

Having seen FinTech evolve throughout her career, she also recounts the field’s greatest successes in terms of benefits to the financial system and society overall. Theo comments on why the US is so far behind places like Japan and China in terms of digital payment options, noting that in China, the development of the ecosystem is primarily driven by large, big tech juggernauts like WeChat and Tencent. Similarly, in Japan, which she emphasizes has been “pretty cash heavy until recent times,” the nation’s conglomerates are pushing the move towards digital payments. She stresses, however, that while Asia has a rich FinTech ecosystem, it is at different levels of development because the region is not a monolith.

​Theo also shares her thoughts on how long it will be before the US fully embraces digital banking, as many Americans still seem content to write cheques.

​It is in sharp contrast to Hong Kong, where the South China Morning Post reported in mid-December 2024 that, based on figures from the Hong Kong Association of Banks, the use of cheques in the Special Administrative Region has fallen and is expected to continue to decline at an annual rate of between 10-20%. The number of cheque payments in the city dropped by 27% to 4.33 million this November, compared with 5.9 million in November 2021, while the value fell by 22% to HK$468.54 billion per month over the same period.

Other markets, such as the UK, Australia, and Singapore, are also trying to reduce the use of cheques.

Yet, as Theo remarks, the number of regulators in the US might at least partly explain its sluggishness in rolling out more digital payment options.

​Reflecting on the post-Covid world, she points out that worldwide, financial regulators and central banks have been proactive, despite geopolitical issues, to create linkages for seamless cross-border transactions and transfers—as seen by Project Nexus, the Bank of International Settlements Innovation Hub, and the Monetary Authority of Singapore building towards a unified system for fast payments across Southeast Asia, with a planned extension into South Asia.

What used to be siloed and driven by private organizations has led regulators to see the value of interconnectivity now.

The challenge is how FinTech can benefit financial inclusion. There is a widespread perception that tech creators sometimes promise more than they can deliver, especially in terms of bettering the lives of the poor, elderly, illiterate, uneducated, or uninformed.

The problem is not confined to developing nations: 4.2% of US households, or 5.6 million households, are classified as unbanked, with a further 14.2%, or 19 million households, deemed underbanked. The question is, therefore, one of fairer access to the financial apparatus.

​The discussion concludes with Theo stating that it is not technology that poses the most significant challenge. Instead, she says, it is the adoption of tech by local regulators or enterprises and the regulations that enable them. She also remarks on generative AI and machine learning in financial services and whether they can facilitate digital inclusion in the Asia-Pacific and the West while acknowledging the related liability issues and that regulators are perhaps not as tech-savvy as they need to be.

​Looking ahead, Theo notes that a key challenge is that many startups and tech firms generally focus their marketing and sales on younger users—despite more wealth held by older people—because of a perception of a lack of digital competency amongst the latter by entrepreneurs.

​She says another roadblock to tech adoption is by financial institutions themselves, as many banks and MNC CEOs are more focused on the bottom line and fear that large, transformational projects will cost millions and hurt their remuneration.

Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

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Connect with RR Podcast at:

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Facebook: https://www.facebook.com/hkufintech.fb/
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Twitter: https://twitter.com/HKUFinTech 
Threads: https://www.threads.net/@hkufintech
Website: https://www.hkufintech.com/regulatoryramblings 

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Fox on Podcasting

Fox on Podcasting – Celebrating Excellence in Podcasting in the International Arena

Join Tom Fox as he explores the world of podcasting, and get ready to be inspired to start your podcast. Today, we begin a three-part series on honoring excellence in podcasting and the Agora Awards. We visit with Ajay Shamdasani and Jonathan Armstrong, both award-winning international podcasters.

In this inaugural episode of the Compliance Podcast Network Agora Awards, Tom introduces two guests, Ajay Shamdasani and Jonathan Armstrong, both leaders in compliance and podcasting. Ajay, a veteran writer, editor, and researcher based in Hong Kong, discusses his background, the inception of his podcasting career, and the themes explored in his shows Regulatory Ramblings and Reglex Perspectives. His approach emphasizes the art of conversation and engaging discussions on law, regulation, and technology.

Jonathan Armstrong, a UK data privacy and protection expert, shares insights into his podcasting journey with shows like Life with GDPR and Tech Law 10. He elaborates on how his background in broadcasting as a child influenced his podcasting style today. The conversation explores the role of podcasting in compliance, the challenges and rewards of starting and maintaining a podcast, and key moments from their podcasting careers, including hard-hitting episodes on modern slavery and AI.

Key highlights:

  • Ajay’s Podcasting Journey and Insights
  • Jonathan’s Podcasting Journey and Insights
  • The Art of Podcasting: Strategies and Reflections
  • The Podcasting Scene in Asia
  • The Podcasting Scene in the UK and EU
  • Podcasting Highlights and Memorable Moments

Resources:

Ajay Shamdasani

Regulatory Ramblings (a joint production of HKU’s Faculty of Law and FinTech Academy)

The Reglex Perspective (produced by Reglex)

LinkedIn Profile

Heart of the Matter (produced by Conventus Law)

Jonathan Armstrong

Life with GDPR

Tech 10 Law

Punter Southall

LinkedIn Profile

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Regulatory Ramblings

Regulatory Ramblings: Episode 59 – Four Decades Fighting Human Trafficking and Modern Slavery – A Diplomat Reflects with Matt Friedman

As a former US and United Nations diplomat, Matthew Friedman has been a true warrior on the frontlines against modern slavery and sex trafficking for over four decades. He is an international human trafficking expert and the CEO of The Mekong Club, a non-governmental organization comprised of Hong Kong’s leading businesses that have joined forces to help end all forms of modern slavery.

The Mekong Club is very active in the ESG space and is well-versed in identifying red flags and appropriate metrics to gauge anti-human trafficking compliance.

Previously, he worked for the United States Agency for International Development and the UN in over 40 countries. Matt offers technical advice to numerous governments, banks, and corporations working to eliminate all forms of modern slavery and authorizes fifteen books. In 2017, he won Asia’s prestigious “Communicator of the Year” Gold Award.

His postings have taken him all over Asia, from Nepal to Bangladesh and Thailand. The Mekong Club works with private sector banks, manufacturers, retailers, and the hospitality sectors to do what they need to do in the fight against human trafficking and slavery.

The topic of modern slavery – more colloquially referred to as human trafficking – is a bleak one. In this episode of Regulatory Ramblings, Matt chats with host Ajay Shamdasani about what the global banking and financial institutions and multinational corporations can do about the matter.

The problem indirectly affects us all: estimates are that 50 million people in the world are currently in some form of slavery. Twenty-seven million of them are engaged in forced labor, of which 82% of this figure is associated with supply chains.

Though many survivors of human slavery put on a brave face and try to go about their lives as best they can, it is debatable whether or not they can truly ever be made whole.

The conversation begins with Matt sharing his background and what drew him to the cause of modern slavery. He also stresses that despite the Mekong Club being an NGO, it works with the private sector, perhaps more so than with other NGOs or state bodies. As he notes, there is a greater impetus to take action to effect change in the private sector than in the public sector.

Working with the private sector is an approach that has served Matt and the Club well because, as he puts it: “The private sector has a sense of urgency, unlike the public sector. If a company does an audit on human trafficking and there is a problem, within fifteen minutes, they will call a meeting of all the relevant stakeholders and work to remediate it. The private sector does more than traditional NGOs because they are closer to the action,” he said. He added that NGOs tended to intellectualize matters, often reducing them to purely academic or legal concerns.

Reflecting on his four decades in the field, Matt also recounts what has changed about human trafficking and what has remained the same. As he points out, the evolution of human trafficking is interesting, going from forced manual labor to compelling enslaved persons to undertake more elaborate crimes such as scam farms and ‘pig butchering’ schemes.
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The discussion concludes with Matt sharing his views on how the financial sector can protect themselves from becoming unwitting participants in human trafficking and the sex trade. There is an intersection between money laundering, financial crime, and human trafficking, he says, and it is something the UN Counter-Trafficking program was created to combat.

The Regulatory Ramblings podcasts are brought to you by the University of Hong Kong—Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

You might also be interested in:

Connect with RR Podcast at:

LinkedIn: https://hk.linkedin.com/company/hkufintech 
Facebook: https://www.facebook.com/hkufintech.fb/
Instagram: https://www.instagram.com/hkufintech/ 
Twitter: https://twitter.com/HKUFinTech 
Threads: https://www.threads.net/@hkufintech
Website: https://www.hkufintech.com/regulatoryramblings 

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Regulatory Ramblings

Regulatory Ramblings: Episode 58 – The AI-fication of Jobs with Huy Nguyen Trieu

Huy Nguyen Trieu is the author of the new book The AI-fication of Jobs. He is the co-founder and Ms. Tram Anh Nguyen of the London-headquartered Centre for Finance, Technology and Entrepreneurship (CFTE). As a global FinTech knowledge platform, CFTE opened its Abu Dhabi office earlier this year and its Singapore office.

A leading voice in the world of AI, Huy’s book is the product of 10 months of effort and debuted at the recent Singapore FinTech Festival in early November 2024. It explores how AI reshapes the workforce and moves beyond the common question of “Will AI take my job?”

Huy shares with Regulatory Ramblings host Ajay Shamdasani how his book provides a structured framework for understanding AI’s impact from displacement to augmentation and how such changes and trends can be leveraged for future success and insights. It is an accessible, future-focused guide and a must-read for anyone interested in AI’s role in shaping careers, industries, and society.
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As Huy puts it: “AI is a complex, personal topic – 85 percent of workers believe it will significantly impact their jobs. But understanding what that means is often confusing.”
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Huy goes on to describe his professional background: He is an engineer by training and an entrepreneur by nature. As a “big picture” person, he’s interested in the revolution in technology that is transforming finance—what he calls Disruptive Finance.

To quote Huy: “Put simply, we are facing a Napster moment: technology is set to revolutionize finance, which will massively impact the global economy, business, and society.”

His passion, he says, is building and growing businesses—especially in changing environments. This passion led him from being a tech CEO in New York to managing director at an investment bank in London to founding partner at a Hong Kong-based accelerator and now co-founder of the CFTE.

As a managing director at Citi, Huy grew a business that helped Europe’s largest insurance companies, major pension funds, and international banks adapt to an increasingly complex environment.
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He also adores teaching at scale, having co-created some of the largest FinTech courses in the world at Oxford University’s Said Business School, the University of Hong Kong University, Imperial College, and now CFTE.
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As CEO of The Disruptive Group, he’s developing a firm that builds innovative finance businesses that leverage technology and advises CEOs of large organizations. One of TDG’s projects is the CFTE, which is dear to Huy’s heart as he explains the impetus for the body’s creation.

“CFTE is the answer to a very simple question: as a professional in financial services, how do I acquire the skills to be future-proof? The question is simple, but the solution is hard because there is much knowledge to acquire, the industry is changing all the time, and professionals do not have time to learn,” Huy says.  “Together with hundreds of experts [from heads of innovations in banks to CEOs of challenger banks and CEOs of FinTech venture capital firms], we have created a platform that helps the industry acquire this knowledge quickly, from FinTech to artificial intelligence to open banking,” he concluded.

A key observation of the book is that AI and its massive impact on careers portends a shift that will give rise to a class of “supercharged professionals” – those who combine their skills with tech to thrive like never before. And then there are the “creative disruptors,” a select few poised to build entirely new industries from scratch. Huy urges us all to embrace this future, not just for ourselves, but to ensure the potential benefits of AI for everyone.
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“On average, we are all about average most of the time. Yet, the results that can be gained through AI are now consistently above average,” he warns while acknowledging there are no easy answers to how the workforce can ‘raise their game’ to avoid redundancy.
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In addition to London, the CFTE is also based in Singapore and Hong Kong and earlier this year opened an office in Abu Dhabi, given the deep need in the Middle East and, in particular, the GCC nations for education in the technologies that will shape the future of work. The CFTE works with most Tier 1 financial institutions, governments, and central banks.

The Regulatory Ramblings podcasts are brought to you by the University of Hong Kong—Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

  • Follow Huy Nguyen Trieu on LinkedIn

  • “The AI-fication of Jobs” on: Amazon

  • CFTE book page: Webpage

You might also be interested in:

Connect with RR Podcast at:

LinkedIn: https://hk.linkedin.com/company/hkufintech 
Facebook: https://www.facebook.com/hkufintech.fb/
Instagram: https://www.instagram.com/hkufintech/ 
Twitter: https://twitter.com/HKUFinTech 
Threads: https://www.threads.net/@hkufintech
Website: https://www.hkufintech.com/regulatoryramblings 

Connect with the Compliance Podcast Network at:

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Regulatory Ramblings

Regulatory Ramblings: Episode 57 – A Path to Financial Inclusion Through Technology with Eelee Lua

Eelee Lua is chief of staff and a director at xcube.co – a Singapore-based corporate venture studio. A seasoned business leader in technology specializing in risk mitigation and strategic partnerships, having entered the risk and compliance field 13 years ago and has previously held roles at AsiaVerify and the RISQ Group.

Eelee holds a board director accreditation from the Singapore Institute of Directors and actively contributes to industry communities such as the Singapore FinTech Association and Women In Alliances.
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She recently penned an article entitled “Circular Financial Identity—The Missing Piece for Financial Inclusion,” which forms the basis for this episode’s discussion.

In this installment of Regulatory Ramblings, Eelee talks to host Ajay Shamdasani about her piece and how financial inclusion remains a critical global issue, with approximately 1.4 billion people still lacking access to formal financial services. She also shared a little about Defy, an xcube company on a mission to address financial inclusion. Her observation that traditional financial systems often exclude marginalized populations, such as low-income individuals, women, rural communities, and refugees, compelled her to write the article. Financial exclusion not only limits economic opportunities but also perpetuates poverty.

Yet, all is not lost, and Eelee believes technology may deliver true financial inclusion. A promising solution to bridge this gap is Circular Financial Identity (CFI), she says, “which has the potential to transform financial inclusion efforts worldwide.” The key, she says, is understanding CFI because “unlike traditional digital identities that rely on static information and centralized databases, CFI employs a dynamic, decentralized, and interoperable system,” – thereby enabling “under-documented individuals, including refugees, to gradually build their financial identity by capturing their digital financial footprint across various domains such as earning, spending, borrowing, saving, investing, and lending.”

Eelee says the circularity of data, particularly the continuous accumulation and reuse of financial data, creates a comprehensive, robust, and evolving picture of their financial behavior and capabilities, enabling access to a broader range of financial services.
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“Circular Financial Identity represents a transformative approach to enhancing financial inclusion. By leveraging digital technologies, CFI can provide underserved populations, including refugees, access to essential financial services, reduce costs, and empower marginalized groups. While challenges remain, the potential benefits of CFI make it a critical piece in achieving universal financial inclusion,” she says.

Eelee also shares a little about her background, upbringing, education, and what launched her toward a career in compliance. She also describes what Xcube does and her own “moment of epiphany” when she realized that the world of cryptocurrencies and digital assets was something important that she needed to pay attention to in the coming years.

Looking ahead, while she thinks Web3 will have a marked impact on banking in Southeast Asia and the Middle East, she cautions that many of the world’s financial institutions have yet to consider the interoperability and integration issues of using such technologies in the current world.
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A resolute believer in the power of targeted technology use to aid the perennial global cause of financial inclusion and bring about a more egalitarian world with a more level playing field, the conversation concludes with her reflections on a decade plus in the risk and compliance field and her greatest lessons, challenges, and regrets during that time.

Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

You might also be interested in:

Connect with RR Podcast at:

LinkedIn: https://hk.linkedin.com/company/hkufintech 
Facebook: https://www.facebook.com/hkufintech.fb/
Instagram: https://www.instagram.com/hkufintech/ 
Twitter: https://twitter.com/HKUFinTech 
Threads: https://www.threads.net/@hkufintech
Website: https://www.hkufintech.com/regulatoryramblings 

Connect with the Compliance Podcast Network at:

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Regulatory Ramblings

Regulatory Ramblings: Episode 56 – The Intersection of Financial Crime and Cryptocurrencies with Chengyi Ong

Chengyi Ong leads public policy in the Asia-Pacific region for Chainalysis from the firm’s regional headquarters in Singapore. Drawing on Chainalysis’s blockchain data analytics platform, she works with public and private sector stakeholders to distill developments in digital asset markets and their intersections with global and regional regulatory trends.

Before joining Chainalysis, Chengyi spent 13 years at the Monetary Authority of Singapore, holding roles in financial regulation and supervision, financial sector development, and central banking. She also served as the Advisor to the Executive Director for Southeast Asia at the International Monetary Fund.

In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about the intersection of money laundering, financial crime, and cryptocurrencies.

The conversation begins with Chengyi describing her upbringing, formative years, career path choice, and time as a regulator at the MAS. She then discusses what Chainalysis does, its market position, and her interest in the digital asset sector.

She shares her views on the rising levels of both crypto-native and non-crypto-native money laundering, why such trends are growing, and the types of crimes emanating from Asia, making reference to key findings from Chainalysis’ recent report on the matter, including the 2024 Crypto Crime Report and the 2024 Crypto Money Laundering Report (links below).
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Chengyi also discusses her thoughts on stablecoins being used for money laundering, what her firm’s report says about the destination of illicit funds, and the best ways to prevent crypto-native money laundering – especially in the Asia-Pacific. To that end, she is candid about what regional regulators should do to tackle this issue, noting that more needs to be done. What ensues is a deeper chat about what regulators’ role in ferreting financial crime should be vis a vis cryptocurrency exchanges and financial institutions – the latter of which are financial gatekeepers in their own right.

The conversation concludes with Chengyi reflecting on the arc of her career and how AML regulations have evolved in APAC over the years. She stresses that in an age of aggressive enforcement actions, sanctions, and not insubstantial fines, it will be imperative for organizations to verify the entities they are transacting with and engaging with. She offers some suggestions as to how they may do so.

Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

Useful links in this episode:

You might also be interested in:

Connect with RR Podcast at:

LinkedIn: https://hk.linkedin.com/company/hkufintech 
Facebook: https://www.facebook.com/hkufintech.fb/
Instagram: https://www.instagram.com/hkufintech/ 
Twitter: https://twitter.com/HKUFinTech 
Threads: https://www.threads.net/@hkufintech
Website: https://www.hkufintech.com/regulatoryramblings 

Connect with the Compliance Podcast Network at:

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Regulatory Ramblings

Regulatory Ramblings: Episode 55 – A Former Singapore Regulator Reflects on the World of Virtual Assets with Angela Ang

Angela Ang is TRM Labs’ senior policy advisor in Singapore. TRM Labs is a world-renowned blockchain intelligence company. She is also a former regulator, having spent over a decade at the Monetary Authority of Singapore (MAS), where she was most recently its deputy director in charge of licensing for payments and crypto service providers. Angela has also been recognized as a LinkedIn Top Voice for Finance in Asia for her thought leadership on digital asset developments in the region.

In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about growing up in Singapore, spending time in the US, her education at INSEAD, and ultimately, the early days of her career in a business development capacity at the Monetary Authority of Singapore (MAS) where she promoted the Lion City as an international financial center.
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Recalling her experiences as a regulator with fondness, she notes that as a MAS officer, she was privileged to see policymaking at the highest level up close—emphasizing that few jobs enable one to work with ministers and policymakers so early in their careers. Notwithstanding the high intellectual rigor of working for a body as mission-driven as the MAS, she stresses that regulators are people, too.

The discussion then moves on to what TRM Labs does in blockchain intelligence and analytics. Angela describes it: “Blockchain analytics is like Google Maps for blockchain. We help clients make sense of public blockchain data and use it to fight fraud and financial crime.”  She points out that while the immutable ledger functionality of a blockchain is invaluable, it is often not easily understood by clients, likening it to “looking at a satellite image without context.” TRM, she says, helps make sense of blockchain ledgers by layering information about entities and their risk levels to give clients a better picture.
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In that regard, she sees parallels between her time at the MAS and TRM Labs, which also has a compliance-centric business model and is mission-driven. “A lot of our staff have joined [TRM Labs] from the public sector,” Angela says, lauding the firm’s spirit of nimbleness and entrepreneurialism.

She also recounts her first exposure to cryptocurrencies and blockchain in 2015 when her boss asked her to undertake a research project on the subject as part of the MAS capital markets team. Her impressions then and now are that while there is much to be said for the “promise of blockchain,” they need to be weighed against the “technology and risks of investing in crypto”; Angela recalls former MAS head Ravi Menon’s speech, paraphrasing his central policy point of Singapore saying yes to digital asset innovation, but no to cryptocurrency speculation. She said such an approach was prudent for the Lion City to adopt as “crypto will be around for the foreseeable future.”

She then shared her views on the regulation in Asia, stating that the region is leading the pack regarding regulatory clarity. “There has been more movement in crypto regulation across the region, especially in financial hubs like Singapore and Hong Kong,” she says.

​For example, Japan (2017) and Singapore (2020) were amongst the first countries to pioneer bespoke crypto regulation, fully realizing the failures of crypto for the investing public over the past decade, she says. “We need to regulate and think about it [crypto] differently.”

There has been massive movement, for example, Singapore’s rules on custody of crypto assets, expansion of licensing requirements, and Hong Kong’s regulation of over-the-counter crypto trading and its virtual asset service provider (VASP) licensing regime this year.

Yet, with Asian jurisdictions at different levels of development, Angela acknowledges that even with digital assets, every Asian regulator will have their philosophy on how to view crypto. She is broadly optimistic about the direction of things, citing the region’s general move towards greater regulatory clarity.

Citing a deep-dive regional survey by TRM’s policy team, the trend worldwide was overwhelmingly (80%) towards tightening regulation and more consumer protection measures.

“Regulation is about control and the requirements needed to prevent illicit activity. Sufficient enforcement is there to ensure consequences,” Angela said, noting that more levers for action against recalcitrant entities were needed.

She added that the authorities also had the responsibility to deeply understand the technology implementation and controls regulated entities must comply with to ensure they meet the requirements of the regulatory outcomes they have in mind. This also requires having enough skilled people to conduct rigorous supervision as needed.

The conversation then turned to the perceived talent shortage in crypto compliance. While explaining that digital finance was different from traditional finance, she said that older principles of compliance and risk management were still appliable, “but the devil is in the details,” adding: “You need good governance and disclosures; it is the same with traditional finance as with digital finance. There is overlap, but the technology of blockchain and crypto creates differences. For example, verifying ownership of a bank account differs from verifying ownership of a blockchain wallet.”

Technology’s changed landscape also gives rise to the related topics of SupTech and RegTech, which are key parts of what TRM does. As Angela explains, crypto compliance professionals use TRM’s tools for ongoing due diligence and transaction monitoring. Yet, regulators also use TRM’s offerings for RegTech purposes – to obtain real-time information about entities’ activities on the blockchain.

“As regulators build their knowledge of blockchain and crypto, we will see greater opportunities for SupTech applications offering real-time monitoring without adding to the [compliance] burden of regulated entities. The goal of SupTech should be to make tools user-friendly for non-experts such as non-cryptographers and non-asset tracers,” she said.

TRM Labs’ data shows that the total amount of crypto crimes emanating from Asia was US34.8 billion, but that is still just 0.63% of the global total. Angela notes that figure is comparable to traditional finance while acknowledging that crypto is borderless and that organizations and syndicates operate across borders across and from Asia.

She says VASPs have evolved to respond better to crypto crime, citing the loss of trust in recent years. “They are winning it [trust] back. As the industry matures, with more governance and compliance, they realize their role in fighting crime,” she said, emphasizing TRM’s role in working with the public and private sectors.

Angela stresses that VASPs have lower rates of crypto crimes with proper licensing and mandated risk controls than in less regulated jurisdictions. While noting that there are different degrees of risk controls, “few exchanges in the world now exist with no risk controls,” she says. Those are high-risk exchanges and conduits for bad actors moving outside regulated parameters. Most exchanges have degrees of risk control, and there has been a leveling up of crypto regulation worldwide.”

Looking ahead, she pointed to market misconduct as an evolving area in digital finance. The Madrid-based International Organization of Securities Commissions (IOSCO) FinTech Taskforce has singled it out as a priority item for crypto regulators, she says.

Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.

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Regulatory Ramblings: Episode 54 – From Secret Service Agent to Global Financial Crime Fighter: David Caruso’s 30-Year Journey

David Caruso is the founder and managing director of the Dominion Advisory Group, a consulting firm based in Virginia, near the nation’s capital. The firm works with banks facing regulatory enforcement actions across the U.S., Europe, and Asia. David aids institutions and organizations in navigating financial crime risk and compliance modernization globally.

As a former special agent with the US Secret Service and a graduate of George Washington University since 1996, he has been at the forefront of shaping the financial crime risk and compliance profession more generally. Building anti-money laundering (AML) and sanctions compliance programs at banking and financial institutions across the US and internationally, overseeing headline-grabbing corruption and money laundering investigations, and building and selling a RegTech software firm have afforded him an ideal perspective to reflect on every major issue and trend occurring in the financial crime compliance space for the past 25 years.

In this episode of Regulatory Ramblings, David shares his reflections on a nearly three-decade career in AML and financial crime compliance with our host, Ajay Shamdasani. 

He recounts having worked at global institutions like JP Morgan, Riggs Bank, Wachovia, Washington Mutual, and HSBC, to name a few. His notable achievements include his time as Riggs Bank’s chief compliance and AML officer.

In that role, he was hired to address some program weaknesses cited by the US Treasury Department’s Office of the Comptroller of the Currency (OCC). While at Riggs, David’s team uncovered two notorious international corruption schemes involving the government of Equatorial Guinea and former Chilean dictator Augusto Pinochet. The team’s work led to investigations by the Department of Justice and the U.S. Senate Permanent Subcommittee on Investigations. 

The cases drew worldwide media attention from justice authorities in the US, UK, Spain, and Chile. The facts uncovered by David at Riggs shook US lawmakers and regulators, kicking off 10 years of active regulatory and law enforcement action against banks across the US. 

After Riggs, David founded The Dominion Advisory Group in 2005. From his ringside seat near Washington, DC, he works closely with executive management, boards, and outside counsel to craft responses and build entire financial crime risk and compliance programs to address regulatory concerns—of which there has been no shortage in recent years. 

David also discusses the allure of AML and financial crime compliance and what brought him to the professional path he has been on for over three decades. Methodologically speaking, he recounts what has changed in AML and financial crime in that time and what has remained the same. 

He concurs that since 1970, so many additional requirements and expectations have been created that AML teams still need to catch up on their primary mission. Reflecting on the impact of the Bank Secrecy Act (1970), the USA PATRIOT Act (2001), the Foreign Account Tax Compliance Act (2010), or FATCA, and the more recent Anti Money Laundering Act (2020), he shares his views on how the impact of regulatory action has distracted from compliance professionals’ more critical tasks—with an eye towards how the regulatory exam-focused mindset of money laundering reporting officers (MLROs) affects operations and innovation. 

David also depicts the pervasive and ongoing discrepancies between what domestic and international/supernational policy-setting organizations, like the Financial Action Task Force (FATF), based in Paris, say and what they do. He says, “No one wants to ask if new rules and regulations are working and whether they prevent crime or have the unintended consequence of reducing [economic] growth?” 

He acknowledges the degree of geopolitical hypocrisy when it comes to AML and financial crime compliance, as well as when it comes to fighting bribery, fraud, and corruption internationally. Washington, New York, London, and Brussels all too often regulated the financial world. Yet, while the US and UK, and increasingly the EU, are some of the most aggressive jurisdictions regarding financial crime enforcement actions, their regulatory apparatus is often used to further their geopolitical goals. It is a view that many outside the West hold. 

The conversation concludes with David’s views on why sanctions against Russia stemming from its 2022 invasion of Ukraine have largely been unsuccessful, how technologies such as artificial intelligence can help AML/KYC/FCC compliance, and what policy recommendations he suggests moving forward. 

We are bringing you the Regulatory Ramblings podcasts with assistance from the HKU Faculty of Law, the University of Hong Kong’s Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech.

Useful links in this episode:

  • Connect or follow David Caruso on LinkedIn

  • Dominion Advisory Group: Webpage

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Regulatory Ramblings: Episode 53 – Advanced Quantum Computing Threatens Blockchain Transactional Security and Anonymity with Kapil Dhiman (Quranium)

Mumbai-based Kapil Dhiman is the co-founder and CEO of Quranium. An entrepreneur to his core with a creative and artistic side—coupled with a passion for problem-solving—Kapil is a seasoned leader with 12 years of diverse international consulting experience in dealing with enterprises, startups, and funds.

He is also a former Web 3.0 leader at PwC India and an award-winning CEO who crafted the Metaverse Startup of the Year 2023 from scratch. Kapil, a distinguished global speaker and author, has helped over 20 startups in the Web3 ecosystem with their go-to-market (GTM) and product strategies.

In this episode of Regulatory Ramblings, Kapil chats with host Ajay Shamdasani on how advances in quantum computing can compromise Blockchain transactional security and anonymity.

Much has been said about quantum computing and how it will revolutionize the world—and part of that is reflected in the new Cold War between the US and China. Beijing is constantly eager to tout its advances in the field, and the American and European mainstream press clamor about how the collective West is falling behind—in a manner almost reminiscent of the US response to the USSR’s 1957 Sputnik launch.
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Some, such as Kapil, contend that quantum computing can breach the security of cryptocurrency transactions, notwithstanding the much touted ‘National Security Agency (NSA)-level encryption’ that Polish virtual asset advocates say exists when using a Blockchain.

Kapil shares a bit about his background and the challenges of growing up in a military family with a father he was very temperamentally different from. He recounts the difficulties of starting his firm, the joys and hurts of following an entrepreneurial path, and what he envisages for Quranium.
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The discussion defines quantum computing, whether it should be regulated globally, and whether each industry using such computers should devise its own rules. Kapil concludes that each country must decide for itself—in the same way artificial intelligence is regulated globally.
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Kapil also shares his thoughts on the notion that AI will come alive once quantum computing reaches a mature state. He addresses the issue of whether there is a mismatch between computing power and the ability to use AI to its fullest potential.
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A lingering concern is that AI in its current state is not ‘ real AI’ and that the purest version of AI will require more advanced quantum computing.
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The conversation concludes with Kapil commenting on what Web 3.0 means on a practical level. He dispels the cliché that creative and artistic types like himself are not practical and business-savvy, stating that such things can be learned if one is diligent and motivated enough.

We are bringing you the Regulatory Ramblings podcasts with assistance from the HKU Faculty of Law, the University of Hong Kong’s Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech.

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Regulatory Ramblings: Episode 52 – AI vs. Financial Scams: Why Banks Aren’t Doing Enough in the Fight Against Sextortion and Fraud with Oonagh van den Berg

A lawyer by training and an entrepreneur by vocation, Oonagh van den Berg founded the compliance consultancy and training firm RAW Compliance. She is a highly regarded international compliance professional with two decades of experience in London, Hong Kong, and Singapore.

Growing up in Northern Ireland against the violent backdrop of “The Troubles” during the tumultuous 1980s, she’s a veteran at weathering the sharp, harsh curveballs that life sometimes throws us. She went on to become a lawyer, compliance officer, recruiter, and later, a consultant and educator despite the hardships she encountered as a young girl, such as the Irish Republican Army shooting her police officer father.

This episode of Regulatory Ramblings is topical, timely, and deeply poignant. Oonagh talks to our host, Ajay Shamdasani, about the need for artificial intelligence (AI), mainly by international banking and financial institutions and multinational corporations more generally, to combat financial scams, deep fakes, and sextortion:

It is an issue that hit close to home earlier this summer as Oonagh while working to raise awareness of the matter, learned that her 13-year-old daughter and a few of her school friends became the victims of blackmail because of some innocent photos shared on Snapchat. Raising awareness, Oonagh says, can help prevent others from experiencing the same thing. She shares that RAW Compliance has been working on important awareness videos about social media scams and sextortion targeting pre-teens, teenagers, and young adults.

A recent poll by Europol revealed that cybercriminals are increasingly exploiting new technologies to commit complex and dangerous crimes – and, in many instances, using AI to commit vile acts of violation against the unwitting. For example, malicious large language models (LLM) are used to develop scripts, phishing emails, and online fraud advertisements and to overcome language barriers that allow sex offenders to groom victims in any language and impersonate peers.

Then there is the threat of generative AI because AI-altered and fully artificial child sexual abuse materials are now so realistic and used in sextortion cases that it has resulted in the blackmail and subsequent suicide of some victims.

Additionally, AI deepfakes are becoming more sophisticated and accessible. Such technologies make it vexatious for law enforcement to identify victims and find the appropriate legal framework to charge criminals. Yet, law enforcement has grown more tech-savvy and started using more advanced detection tools. It is still an uphill battle, however, as the authorities are all too often playing catch-up.

Oonagh also discusses her firm’s groundbreaking collaboration to support victims of financial scams and help recover their assets. Together with Nick Leeson, the infamous former 90s-era Barrings trader, the pair combine their expertise to make a tangible difference in the fight against financial fraud. (Links below)

Oonagh says it matters because “Financial scams leave lasting impacts and destroy lives, with little to no help available. Recovery can feel overwhelming. By joining forces, we aim to turn the tide and provide the help and guidance victims need to reclaim their financial futures.”

In her view, banks are not doing enough to help victims of financial scams, mainly due to shortcomings in their technology and fraud detection systems. In the UK, for example, financial crime is a growing issue, with over 3.5 million people affected by scams annually, leading to losses exceeding £1.2 billion.

The problem is equally severe in continental Europe, with countries like Ireland and the Netherlands reporting significant increases in scam-related incidents, resulting in hundreds of millions of euros in losses.

Similarly, in the US, financial scams cost consumers over $3.3 billion annually.

The conversation continues with Oonagh fleshing out how financial institutions can navigate evolving regulations and effectively monitor child sexual abuse materials (CSAM). She also discusses the challenges and strategies for investigating CSAM and human trafficking in traditional and decentralized financial systems. She emphasizes the hurdles of global technology in combating such crimes and estimates the value of suspected CSAM transactions using fiat versus cryptocurrency.

The discussion concludes with Oonagh pointing out that the financial sector has often shirked its responsibility when it comes to anti-money laundering, ‘pig butchering,” human trafficking, and financial scams. The sad truth is that many victims will never truly be made whole.

She stresses that when it comes to law enforcement and investigators, the biggest takeaway for traditional financial crime compliance professionals and blockchain investigators is understanding suspicious red flags and other typologies supporting investigations.

We are bringing you the Regulatory Ramblings podcasts with assistance from the HKU Faculty of Law, the University of Hong Kong’s Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech.

Useful links in this episode:

  • Connect or follow Oonagh van den Berg on LinkedIn

  • RAW Compliance: Webpage

  • Oonagh van den Berg with Nick Leeson, through FundsRehab.com, offers support and solutions for those impacted by financial scams, guiding them through asset recovery. Assistance is available for those in need. FundsRehab.com is dedicated to combating financial fraud and driving change, with updates on their efforts on the website.

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Twitter: https://twitter.com/HKUFinTech 
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Website: https://www.hkufintech.com/regulatoryramblings 

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