The New York Department of Financial Services (NYDFS) is seeking ways to digitize financial reporting in a new tech initiative that will initially focus on cryptocurrency companies.
- NYDFS Superintendent Linda A. Lacewell announced the department's first-ever "TechSprint" collaborative initiative in a press statement on Thursday.
- The initiative seeks solutions for digital reporting that would give the regulator "instant access" to data from firms under its supervision.
- "The future of financial supervision is digital and needs to happen now," according to Lacewell.
- DFS is making "progress towards automating the reporting" of financial data via the department's regulated entities, she said.
- The move comes amid a growing trend by financial regulators around the globe to employ "TechSprints" as a tool to prototype technical solutions to regulatory issues, per the announcement.
- "Virtual currency companies" were chosen first for the New York scheme due to their "advanced digital capabilities."
- NYDFS also notes that, given that legacy reporting formats are often slow, periodic and laborious, data quality issues arise.
- The department will collaborate with the Conference of State Bank Supervisors, an organization of state financial regulators, and the Alliance for Innovative Regulation to launch the TechSprint.
- Over a number of days, fintech professionals, regulators and experts working on regulatory compliance solutions will come together to propose solutions.
- Those solutions could range from improvements to processes through to a functioning prototype of a reporting mechanism.
- The end result will see a set of common standards hammered out to be provided in an open-source technical framework and later adopted by the DFS and potentially other regulators.
- Design workshops are slated for the fourth financial quarter of this year with the TechSprint expected to occur in early 2021.