The successful development of digital technology has accelerated the digital transformation of the financial industry. TDCC, as the major back office of Taiwan’s capital market and money market, stores abundant and dynamic market data. Promoting digital transformation of financial services, the company also follows the global trend of RegTech and establish an effective and precise regulatory system to assist competent authorities in stepping onto the international stage.

According to Sherman Lin, TDCC Chairman & CEO, TDCC has launched a great number of digital financial services in recent years, such as TDCC e-PASSBOOK, StockVote, ESG Dashboard, Bonds and Bills Transaction Note Blockchain, and Open Banking 2.0. Through Fintech, the company aims to improve operational efficiency in Taiwan’s financial market. FinTech and RegTech are two sides of the same coin; as digital transformation accelerates, RegTech should also be actively developed.

TDCC’s RegTech development can be divided into three phases: TDCC RegTech 1.0, which focuses on document retrieval. Statistical data can be compiled through the database connection design and serve as market supervision assistance and alert for Authority.

TDCC RegTech 2.0 emphasizes the mode of supervisory report and inquiry platforms: Offshore and Onshore Funds Platform, Offshore Structured Notes Platform, AML Anti-Money Laundering and Countering the Financing of Terrorism Platform, CTP Company Transparency Platform, and STO Security Token Offering Platform. Businesses and members involved can report directly on the platforms, and competent authorities can conduct inquires online.

TDCC RegTech 3.0 steps into the era of big data supervision. Since 2018, TDCC has compiled the stocks, bonds, bills, funds, cross-border assets data from its core system into a big data database. According to Authority’s risk control perspective, the data are presented visually and flexibly through an interactive dashboard. In addition, some supervisory information is also developed, including foreign investments by insurance companies, bills market, fund market, electronic voting, stock affairs auditing for the adoption of regulators.

What’s worth mentioning is the “Bills Regulatory Reporting System,” which went live at the end of this June. The system is indeed a remarkable innovation in Taiwan’s financial supervision as it adopts the granular data report advocated by international supervisory agencies. Sherman Lin indicates that granular means the refined data of different attributes or dimensions. For example, credit information can be broken down and categorized based on a borrower’s business, term, interest rate, collateral, and group. The more granular the data, the more comprehensively they cover, facilitating data reorganization, prospection, and analysis. However, such big data need concatenation, cleaning, and verification, which presents great challenges to TDCC’s development team.

TDCC adheres to the principle “There is nothing best but better” in developing RegTech. During the construction of the digital supervisory system, except for API, the project team built up everything from planning to IT. “TDCC needs to learn by doing and cultivate more RegTech talents,” said Sherman Lin. Right after the Taiwan RegTech Challenge- Hackathon came to an end this march, TDCC conducted technical cooperation with innovation groups. In the future, the company will initiate more information exchanges with academic research institutions, financial organizations, and the IT industry to establish a RegTech ecosystem with the common good.