The IASB issued IFRS 17 in a bid to standardize insurance contract accounting, but reinsurance firms, because of their particular idiosyncrasies, will struggle to comply. Unless the IASB makes significant modifications to the standard, reinsurers everywhere will have to reassess the nature of their life insurance contracts.
Many projects labeled ‘private blockchains’ are merely database hygiene or ‘permissioned DLT’ solutions given a more marketing-friendly moniker. But increasing misuse of the term ‘private blockchain’ could create confusion in the market and undermine a clear understanding of blockchain’s real strengths in specific use cases.
Impending regulation affecting shipping fuel will reduce atmospheric pollution but send shockwaves through the shipping and oil industries. Market players have several strategic options, but uncertainty clouds their choices. To what extent is the industry able to adapt, and what will be the likely cost of compliance?
As fear around cyberattacks grows, so-called ‘bug bounties’ offer firms an opportunity to buy information on security vulnerabilities in their systems before they become public or fall into the hands of bad actors. In future these transactions will be moderated by trusted intermediaries; until then firms should carefully weigh up their pros and cons.
In striving for growth, many FinTech firms enter different markets with solutions that use the same underlying technology. As highlighted by recent AML-related issues, however, this technology is seldom regulation-friendly. To withstand deeper inbound regulatory scrutiny, FinTechs must adopt robust risk technology.
Tied to the growing popularity of machine learning (ML) tools is the need to explain their underlying rationale. But buzzwords, like ‘glass box’, are steering the explainability conversation off course. Meanwhile, without proper investment in the tech innovations and governance methods to properly validate ML, it could proliferate throughout the financial industry without the necessary safeguards.
A relative lull in transformative IFRS-related system implementations means that financial firms can relax a little. But not too much: now is the time to work strategically with other players to create real value from IFRS compliance.
Advanced analytics and AI promise revolutions everywhere, but real-world constraints abound. This is notably true in the world of credit scoring, which needs to be understandable, is often slow to give out real-world results, and can be muddied by the addition of unnecessary factors.
A lawsuit against Google’s parent Alphabet threatens broader data security. Regulators should provide clarity on breach disclosure timelines; financial services institutions and suppliers should welcome it.