What is R2A?

Problem Statement

The rapid growth of inclusive digital finance and tech-oriented innovation makes many traditional financial regulatory and supervisory approaches insufficient for marketplaces that now look quite different than they once did. This unprecedented expansion in financial services and the data generated by financial customers comes at a time when financial sector authorities are already faced with stronger requirements to maintain the stability and integrity of the financial system in the aftermath of the financial crisis and in the shadow of increased scrutiny of terrorist financing and money laundering. Moreover, emerging markets financial authorities are increasingly under pressure to remove barriers to access and make the sector more inclusive.


A market shift is underway, from banks that happen to use technology to technology companies that offer financial services historically provided by banks.


In recent years, regulators have rapidly embraced proportional regulation and risk-based supervision. To effectively implement a risk-based approach, however, financial authorities need to more effectively analyze data. Most emerging market financial sector authorities are not yet prepared to make the best use of the data that is submitted by DFS providers. Yet this data - and even more frequent and granular data - could be used to more accurately identify the risks or institutions that require greater scrutiny. New tools for data analysis could also enable financial authorities to better understand risks, profile sectors, compare trends and assess the impacts of different policy options, thereby establishing a body of knowledge and evidence to drive policy reforms. This data can also be aggregated with consumer-sourced data to capture a holistic picture of the market and identify appropriate and targeted actions.

Financial authorities' current tools, processes, techniques and skill sets are inadequate to fully understand the dynamics of increasingly digital markets and the needs of current and potential customers. To boost the capabilities of supervisors, regulators and policymakers, these common challenges need to be addressed.


Financial authorities have difficulty keeping pace with rapid innovation and updating their skill sets to fully harness technology. Their capacity has not increased commensurately with the market’s expansion and digitization, and the inclusion of new consumers.


Project Description

The RegTech for Regulators Accelerator (R 2 A) partners with leading financial sector authorities to pioneer the next generation of tools and techniques for market supervision and policy analysis. Financial authorities want to better monitor and understand financial marketplaces that are increasingly complex and innovative. R 2 A helps them accelerate this capability providing a structured approach to help financial authorities reimagine how they operate and prototyping new solutions to strengthen their capacities.

We believe the future of financial supervision and policymaking lies in using technology and data to improve the speed, quality and comprehensiveness of information in support of targeted, risk-based decision-making. A RegTech approach allows financial authorities to understand marketplaces and understand customer experiences and needs. Through RegTech, on-site and labor-intensive models can be replaced or augmented with new automated, digital-first approaches that take advantage of progressively data-rich environments.

Launched in October 2016, R 2 A is partnering with a select set of leading financial authorities to develop and test next-generation RegTech prototypes that could serve as examples for other supervisors and regulators to follow. R 2 A also engages closely with technology innovators, creating structured opportunities for innovators to propose solutions and collaborate with financial authorities in the design and testing of promising ideas.

Supervision and policymaking can be reimagined using a technology-driven, digital-first, RegTech-enabled approach.


Expected Outcomes

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R2A Project Timeline