Regulatory Outlook 2018

2017 marked two significant anniversaries for the financial services industry in Asia Pacific: 10 years since the beginning of the most recent global financial crisis and 20 years since the Asian financial crisis. These anniversaries are a reminder of the origin of much of the regulation that has evolved across Asia Pacific over the past two decades. New challenges have also emerged as a result of digital disruption, as well as more recent concerns about the repercussions from a slowdown in the Chinese economy. Growth and profitability remain difficult for some firms in the region. Nonetheless, financial services is an important and growing part of Asia Pacific economies and regulators will continue to keep a close watch on the industry.

In this report, we outline our view of the top 10 themes that will shape financial services regulation in Asia Pacific during 2018. Given the great diversity within the region and the significance of each of these 10 themes will vary across different jurisdictions, industry sectors and institutions, we do not undertake a granular assessment of specific rules and regulations. Rather, our aim is to ‘rise above the noise’ and provide a framework for discussions and to build out more detailed regulatory programs.

The future of global regulation:

1.    Dealing with divergence and uncertainty

2.    Managing the long tail of implementation

3.    Understanding the reach of foreign regulation

Culture and conduct:

4.    Strengthening individual accountability

5.    An increasing emphasis on industry codes and professionalism

6.    Building a customer attuned business

Data and digital disruption:

7.    Knowing your data

8.    Responding to the influence of TechFins

9.    Constructing a cyber resilient system

Emerging structural risks:

10. Assessing the impacts of ageing populations and changing climates