Markets regulator Securities and Exchange Board of India (SEBI) will invest Rs 500 crore or nearly $70 million on information technology projects over the next five years, chairman Ajay Tyagi said at a conference in Singapore this week.
“Technology is a key game changer in financial services as it can not only provide faster and better services to the consumer, it can also be a catalyst in improving the ease of doing business,” Tyagi said, while speaking as part of a panel on ‘Technology in Financial Services’ in the Southeast Asian city state.
The panel was part of the 4th South Asian Diaspora Convention organized by the Institute of South Asian Studies (ISAS) at the National University of Singapore. It was chaired by Vinod Rai, former comptroller and auditor general of India.
The Indian capital markets, Tyagi said, are using emerging technologies such as AI (artificial intelligence, ML (machine learning) and deep learning in areas such as robo advisory services, surveillance through social media analytics and security.
Talking about challenges, he said, “There are broader challenges, including compliance requirements, not restricted only to capital markets. Globally, many data localisation and data privacy laws such as GDPR have come into force. In India too the personal data protection bill is being introduced in parliament.”
He pointed out that due to the advancement of technology, funds and securities can flow across the world in a few microseconds. This enables the setting up of complex global structures which could be potentially misused for tax avoidance, money laundering and round tripping.
“Such transactions are now increasingly being structured at a global level while the data available with regulators and governments is largely local. The information exchange between global regulators and governments is not as easy and free-flowing as it is to structure such transactions. This has created enforcement issues.” he added.
He also said that SEBI plans to have its own private cloud to create a common IT infrastructure for all of the regulator’s infrastructure needs which will be readily scalable as well as have systems with open standards compatible with any technology.
“A network operations centre (NOC) for continuous monitoring of the smooth functioning of the SEBI IT network and securities operations centre (SOC) to detect and mitigate cyber-attacks on SEBI’s IT infrastructure in an efficient and effective way, are under implementation, and are expected to be in place by the end of this year.” he said.
The regulator has also planned a data lake project to augment analytical capabilities at SEBI with advanced analytical tools such as AI/ML, deep learning, big data analytics, pattern recognition, processing of structured and unstructured data, text mining and natural language processing, he said.