Governing bodies around the world are considering how to manage and encourage the use of regtech. Meanwhile, cybersecurity developer Cymulate signed a $45 million Series C.
The past week was light on private sector regtech development and heavy on government action. Regulatory bodies in the E.U. and Australia took up the subject of blockchain-based regtech and its various uses. Singapore, meanwhile, expanded grants to speed the adoption of regtech in its finance sector with tens of millions of dollars in funding from its Monetary Authority.
Singapore Announces $31.6 Million Regtech and Fintech Investment
The Monetary Authority of Singapore (MAS) announced on April 30 it will create and expand grant schemes to spur the development and adoption of regtech and fintech in the country’s financial sector.
The S$42 million ($31.6 million USD) funding created the RegTech Grant, which includes a pilot and development track for recipients. The former, capped at S$75,000 per grantee, will be made available for financial institutions to test out regtech products and services. The latter is capped at S$300,000 and will go to companies looking to develop and integrate regtech systems into their operations.
— MAS (@MAS_sg) April 30, 2021
As part of the effort, the MAS also expanded its Digital Acceleration Grant (DAG). It was launched in April of last year to help the finance sector cope with the effects of the coronavirus pandemic. Since its launch, the MAS has received over 1,100 grant applications. It has decided, as a result, to commit an additional S$30 million to the DAG through the end of 2021.
“MAS remains committed to the digital transformation of the Singapore financial sector,” said MAS Chief Fintech Officer Sopnendu Mohanty, in a statement. “We expect the regtech ecosystem to flourish with widespread use of innovative solutions to aid risk management and compliance. The Digital Acceleration Grant has enabled the smaller financial institutions and fintech firms to adapt to the challenges in the past year and we will continue to support these firms as they accelerate their digital transformation journey. We encourage financial institutions to tap on these grants to embed technology into the firms’ DNA.”
Australian Senate Committee Recommends Broad Expansion of RegTech Support, Including a Blockchain National Land Registry
The Select Committee on Australia as a Technology and Financial Center is encouraging the Australian government to create a blockchain regtech platform to handle its national land registry. The group, which reports to Australia’s Senate, encouraged the legislative body to expand support for regtech development in the country in its second interim report released at the end of last month. The report made 23 total recommendations to policymakers, three of which pertain specifically to regtech.
Second Interim Report from the Select Inquiry Select Committee on Australia as a Technology and Financial Centre released. Great the @ajamesbragg led committee is continuing to pursue pro-blockchain regulatory reform. https://t.co/pKbRnZFle7 @BlockchainRMIT @RMITLaw #cryptolaw pic.twitter.com/1lHKezTHZp
— Aaron Lane (@AMLane_au) April 29, 2021
Regarding the land registry, the report reads, “The committee recognizes the substantial potential for blockchain regtech applications to improve and streamline administrative processes in both the public and private sectors. It is encouraged by the work already underway in this area, including with respect to public sector innovation. The committee was particularly impressed with the potential for blockchain to drive efficiencies in the area of land registries, and is recommending that this issue be further explored in the context of the National Cabinet.”
The committee also recommended the country consider its regtech development landscape in its capacity to attract talent and promote business. Australia has laid numerous plans to spur the development of fintech and regtech in recent years. The Department of Industry, Science, Energy and Resources published its National blockchain roadmap (a five-year plan) in February 2020.
European Insurance and Occupational Pensions Authority Considers Its Role in Insurance-Facing Blockchain and Smart Contracts
The E.U.’s European Insurance and Occupational Pensions Authority (EIOPA) is considering new policy regarding the use of blockchain technology and smart contracts as they pertain to insurance. The regulatory body published an overview of the subject in a discussion paper on April 29. It is also inviting public comment through the end of July.
Compared to the Australian Senate committee, the EIOPA is more staid in its approach. The EIOPA identified numerous potentials in blockchain use in the industry, such as its ability to make processes more efficient (and avoid duplication), automate some functions and improve the quality of data. But it also noted potential risks.
“While promising to drive efficiency in business practices and mitigate certain existing risks, the adoption of blockchain may also trigger new risks to insurance undertakings, supervisors, and consumers,” the report reads. “As blockchain technology is still evolving, several challenges are emerging, such as the complexity of the technology, data protection and privacy, cyber risk, integration with legacy infrastructures, or interoperability and standardization between different blockchains. Based on blockchain types and platforms chosen, performance scalability challenges could arise as well. Concerns about the legal status of smart contracts also have been aired.”
Cymulate Announces $45 Million Series C
The cybersecurity developer Cymulate announced on May 5 it had raised a Series C venture funding round totaling $45 million. The round was led by One Peak and joined by previous investors Susquehanna Growth Equity, Dell Technologies Capital, Vertex Growth and Vertex Ventures Israel.
The SaaS provider describes its service as “continuous security validation.” It monitors clients’ cloud and self-hosted networks for lapses in security and potential threats. The company, headquartered in Israel and New York, says it plans to use the funds to continue to scale. According to Cymulate’s announcement, it grew annual revenue by 150 percent in 2020.
“The increasing pace of global cybersecurity attacks has resulted in a crisis of trust in the security posture of enterprises and a realization that security testing needs to be continuous as opposed to periodic, particularly in the context of an ever-changing IT infrastructure and rapidly evolving threats,” said One Peak Managing Partner, David Klein, in a statement.
Prometheum Hires FINRA Vet Rosemarie Fanelli as CRO
The blockchain digital asset securities provider Prometheum announced on May 4 it had hired a new chief regulatory officer. Rosemarie Fanelli comes to the regtech firm with experience as senior adviser to FINRA’s department of member supervision as well as its digital policy group.