A New Digital Governance Order
Governance has always been at the heart of any successful financial institution. However, with “The Big Five,” the importance of digital governance has been greatly amplified. It’s no longer just about having a robust internal control structure. It’s also about ensuring that digital strategies are ethical, transparent, and compliant with the new digital regulations.
The quintet of regulations consists of DA (Digital Act), AI (AI Act), DGA (Digital Governance Act), DM (Digital Market Act), and DSA (Digital Service Act). Even though they don’t all hit the sector immediately, the sector needs to adapt to this new reality. The legislation on digital services, DSA, was published in the EU Official Journal on October 27, 2022, and came into force on November 16, 2022. It applies 15 months from January 1, 2024, or later, depending on what comes after the enactment. DMA, DGA, AI, and DA will follow thereafter.
Not Just a Box to Be Checked
In this new era, compliance is not just considered a department that ensures a box is checked. With “The Big Five,” compliance becomes an integral part of the overall business strategy. Compliance teams are becoming central players in decision-making processes, ensuring that employees of financial institutions understand and adhere to the rules. They also ensure that technological solutions are robust and that compliance with the regulations does not stifle employees’ other daily activities.
Financial companies can ease the pressure and cost burden by taking a technological approach to the derivative challenges associated with the implementation of The Big Five. The critical role that compliance now plays was discussed at Nobly Talks 2023. Leading experts shared their views and recommendations on best practices in this evolving landscape.
The Future of the Financial Sector
As the digital landscape expands, questions of governance and compliance will continue to be central to the future of the financial sector.
The consequences and costs of the new digital services are often borne by consumers, and this is where the EU has decided to take a stand. The EU aims to be a pioneer and advocate for the protection of consumer rights, privacy, and the safeguarding of fundamental democratic rules and principles.
The financial sector bears a heavy and binding responsibility as it establishes, maintains, and develops the economic entities and frameworks for all of us. Nobly Talks 2023 provided a platform for industry professionals to delve into these issues, share experiences, and shape the way forward. This will help set the agenda for the digital future in finance.
