In our supervisory processes, we spend quite a bit of resources and time in continuously monitoring individual institutions. By adopting Regtech, we can enhance the overall risk management and compliance quality of banks. And that in turn leads to better management of the overall risk in the financial system. The HKMA’s Regtech initiatives 1/6  BIS central bankers' speeches  10. So given the importance that we attach to promoting Regtech adoption here, what have we done so far? In the past few years, we have been facilitating the collective efforts by the banking industry, the technology community, and other stakeholders in pursuing their Regtech journey. Let me highlight a few initiatives here. 11. One example is that the HKMA is a pioneer in the introduction of Sandbox and Chatroom, and a number of Regtech projects and ideas have benefitted from those arrangements. Over the years, we have seen a surge in the popularity of Regtech in Hong Kong, as shown by the fact that the number of Sandbox and Chatroom cases focusing on Regtech has increased fivefold since we launched those arrangements several years ago. A growing number of Regtech firms are now showing interest in the Hong Kong market, and we have indeed met a wide range of Regtech firms in our Chatroom sessions. 12. We also complemented those efforts by regular publications such as our “Regtech Watch”. That newsletter is a useful channel for us to introduce banks to potential Regtech use cases. 13.
This is especially the case at board and senior management level, where leaders are often not fully on board with Regtech adoption because they do not fully understand its potential benefits. Regtech promotion 31. So those are some of the key challenges that we need to overcome. Before talking about the solutions, let me share our vision for Regtech in Hong Kong – what we call “Regtech 2025” – which is the underlying theme for the White Paper. 32. Regtech 2025 requires us to achieve 4 key goals by the year 2025. We can crystallise 3/6  BIS central bankers' speeches  these goals in four action-driven verbs : Lead, Adopt, Grow, and Nurture. In terms of “Lead”: Hong Kong aims to become one of the global leaders in Regtech by the year 2025 In terms of “Adopt”: we want to ensure that Regtech will be extensively adopted by the Hong Kong banking sector in the next few years As regards “Grow”: not only do we want wide adoption of Regtech among banks, we also want Hong Kong to become a breeding ground for growing Regtech solutions for financial institutions And finally on “Nurture”: we want to ensure that Hong Kong will emerge as a hub for nurturing Regtech talent 33. With these four key goals in mind, the White Paper sets out 16 recommendations across five core areas, all designed to accelerate Regtech adoption. 34. We can summarise the five core areas using the following framework: 35.