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North America Regtech Weekend Read

Q&A With Diana Paredes, Suade: The Evolving Regulatory Landscape

Having recently launched a Think Tank aimed at modernising regulatory reporting standards following recent market stress events, we sat down with Suade‘s CEO and co-founder, Diana Paredes to learn more about developing regulatory standards and the impact that the company is looking to have.

Could you tell me about the company and your role within it?
Diana Paredes, CEO and co-founder, Suade
Diana Paredes, CEO and co-founder, Suade

I am the CEO and co-founder of Suade, a regtech company that empowers financial institutions to navigate and fulfil their regulatory requirements. With my background in regulatory analysis on the trading floor of a major bank, I recognised the opportunity to innovate and launched Suade in 2014.

Our mission is to alleviate the regulatory burden on firms, minimise errors, and accelerate the compliance process. Over the years, we have garnered recognition and support from regulators and authorities worldwide, including the European Commission, FCA, and MAS. Today, we proudly serve a diverse range of financial institutions globally, leveraging our proactive and technology-driven approach to regulatory reporting.

At Suade, our software platform equips financial institutions with the ability to process vast volumes of regulatory data, perform capital and risk calculations, and automate submissions to regulatory authorities. We employ technologies such as natural language processing (NLP) and artificial intelligence (AI) to transform regulations into code, facilitating a data-driven approach to prevent future financial crises.

How have regulations changed over the last few years?

Over the past decade, there have been significant advancements in prudential regulation, as well as notable areas where progress has been limited. The financial crisis of 2008 served as a wake-up call, prompting regulators and policymakers to reassess the existing regulatory framework and implement measures to enhance financial stability and mitigate systemic risks.

One key development has been the strengthening of capital and liquidity requirements for financial institutions. Regulatory bodies recognised the need to bolster the resilience of banks and other financial entities, leading to the implementation of frameworks such as Basel III. These frameworks have enforced stricter capital adequacy ratios and liquidity coverage ratios, reducing the likelihood of another widespread financial crisis.

However, there are areas where progress has been limited. One such area is the harmonisation of regulations across jurisdictions. Despite efforts to achieve greater consistency in regulatory frameworks, differences in approach and implementation persist. This lack of harmonisation creates challenges for financial institutions operating across borders and may hinder the effectiveness of prudential regulation in a globally interconnected financial system.

Data standardisation plays a crucial role in achieving regulatory harmonisation. By establishing common data standards and formats, regulators can effectively collect and analyse data from financial institutions. Standardised data enables regulators to have a comprehensive and accurate view of the financial landscape, facilitating risk identification and assessment. It also enhances transparency and comparability across institutions, allowing for better-informed decision-making and more effective regulatory interventions.

Risk management development

Additionally, there has been an increased focus on risk management and governance within financial institutions, but the recent market stress episodes involving prominent financial institutions have underscored the importance of ongoing improvements in prudential regulation and strong risk management frameworks. These incidents serve as reminders that even with the existing regulatory frameworks in place, risks can emerge and have far-reaching consequences.

Regulators are likely to carefully evaluate the specific circumstances surrounding these incidents and identify any gaps in prudential regulation that may have contributed to the issues. This assessment will likely inform further potential changes to regulatory frameworks to enhance risk management practices, improve transparency, and strengthen financial institutions’ resilience.

In particular, we may see increased scrutiny of risk models and stress testing methodologies employed by financial institutions. Regulators will likely focus on ensuring that these models adequately capture emerging risks and provide accurate assessments of a firm’s financial health under different stress scenarios. Moreover, these market stress episodes may prompt regulators to reevaluate the effectiveness of existing regulatory tools and frameworks in addressing risks posed by new and evolving financial activities.

Catalysing change in regulation 

Overall, these recent market stress episodes serve as a catalyst for regulatory authorities to revisit and reinforce prudential regulations, with the aim of further safeguarding the stability and resilience of the financial system. By strengthening risk management frameworks, implementing data standardisation, and promoting international cooperation in regulation, regulators can enhance the effectiveness of their efforts and foster a more stable and secure financial environment.

Following these events, we have launched a think tank to modernise regulatory reporting standards with former regulators including William (Bill) Coen, former secretary general of the Basel Committee on Banking Supervision (BCBS) and Suade’s chief regulatory advisor. Collaborating alongside our distinguished senior advisors, such as William (Bill) Dudley, former president of the Federal Reserve Bank of New York, Eugene (Gene) Ludwig, the 27th Comptroller of the Currency under former President Bill Clinton, and Lyndon Nelson, former deputy CEO of the Bank of England.

How will the Suade Think Tank improve the regulatory world?

The recent market stress episodes with Silicon Valley Bank, Signature Bank, First Republic Bank and Credit Suisse, have highlighted a gap in reporting processes and robust risk management. So we launched a think tank, as an extension of our regulatory council, to modernise regulatory reporting standards in the wake of recent events.

At the core of the Think Tank are esteemed individuals who bring a wealth of regulatory experience and the strategic initiative will assist Suade in realising its ambitions of bridging the regulatory gap with modern technology.

In the wake of recent market stress episodes, the role of the Suade Think Tank becomes even more significant. These incidents serve as powerful reminders of the need for continuous improvement in risk management, regulatory frameworks, and collaboration between stakeholders. The Think Tank’s ability to generate impactful white papers and facilitate informed discussions contributes to strengthening the financial ecosystem and enhancing the resilience of institutions.

Through the application of modern technology, the Suade Think Tank strives to bridge the gap between regulators and the financial services industry. By leveraging the collective expertise and insights of our esteemed advisors, we aim to drive positive change, address regulatory challenges, and ultimately contribute to the stability and soundness of the global financial system.

What are Suade’s plans for the future?

At Suade, we envision immense opportunities for innovation within financial regulation. Our future plans revolve around further enhancing our AI capabilities, expanding reporting functionalities, and extending our jurisdictional coverage. We will continue collaborating with regulators worldwide to deliver digital supervision and revolutionise the manual processes entrenched in regulatory reporting by legacy vendors. Our goal is to provide technology that is future-ready.

Final thoughts

At Suade, we operate with a broader perspective, aiming to make a positive impact on people’s lives beyond our client base. We take immense pride in the dedication and hard work of our team, as well as the societal benefits we bring. The establishment of our think tank represents another significant step toward achieving healthier and more effective regulation, ensuring the soundness of the financial system and driving the prosperity of our economies.


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