RegTech and SupTech: Strategic Directions for the Development of Digital Financial Regulation (Finansovìj prostìr)

Summary

• The automated processing level of regulatory reporting (SupTech) in Ukraine is projected to reach 72.8% in 2025, up from 31.0% in 2023.p.5
• Implementation of digital supervisory tools is constrained by 3 primary institutional barriers: regulatory misalignment, technological fragmentation, and cognitive deficits.p.4

Key insights

1. Traditional financial regulation models based on reactive compliance fail to manage systemic risks at digital transaction speeds.p.1
2. Automating regulatory compliance through compliance-as-code removes discretionary risks and enforces consistent rule adherence.p.3
3. Adopting a Supervisory-by-Design framework embeds algorithmic monitoring directly into the product design architecture of financial services.p.3
4. Integrating artificial intelligence and machine learning into SupTech enables a shift from reactive oversight to predictive prudential supervision.p.4
5. Standardizing open finance API protocols allows supervisory bodies to access financial data directly in real time.p.6
6. Standardized digital reporting with taxonomies like XBRL reduces information asymmetry and prevents report falsification.p.7