Regarding the future direction of the Regtech journey, I think the key is that regulators globally should call out specific issues and problems, so we can collaborate and leverage technology to innovate and make progress. Our work in the HKMA involves discussion across the global and regional networks of regulators, and we see benefits in our active participation in the FATF, including co-chairmanship of its Evaluation and Compliance Group for the current term. This sentiment seems to be shared by my colleague from the Monetary Authority of Singapore, which is also very active in the FATF. 28. Transformation is not just for the private sector – at the HKMA we are also implementing a series of changes which will not only apply current technology solutions to our risk based AML/CFT supervision, but will also allow us to adopt future technologies and techniques. In keeping with international trends in AML/CFT, we have been significantly enhancing our ability to source, capture, store and process data across the full spectrum of activities, augmenting the supervisory skills of our existing AML/CFT experts by hiring data specialists. Investing in people is the only way to get the most of out of technology. We need to encourage them through the right culture, and empower them with relevant, practical opportunities. 29. So, if we manage to identify the appropriate Regtech solutions and then throw enough expertise and resources behind those, is that all we need to do in order to face the upcoming challenges? We would need something more, I think.

In addition to that, work has commenced on reviewing respective jurisdictions’ preferential tax regimes against the standards outlined, to combat harmful tax practices. The standar4, which forms one of the four BEPS minimum standards, will require authorities to step up on transparency and substance rules for geographically-mobile activities, such as financial services. It seeks, for one, to prohibit the shifting away of income into preferential tax regimes where businesses have little or no economic activity. Such international developments will directly influence IBFC’s business model going forward. The world that we live in, since the creation of offshore Labuan in the 1990s, has drastically changed. What was relevant then is no more relevant now. We have no choice but to change with it. It is an opportune time for us to review of the current tax framework for Labuan. The purpose of this review is not only to ensure alignment with international best practices, but to confirm the continued relevance of such incentives in catalysing new growth areas. Tax incentives for businesses which have become irrelevant should be rationalised. The allocation of any preferential tax treatment must be supported by clear value propositions that are systematically measured across the qualifying period. Businesses that enjoy tax incentives will be benchmarked against the performance indicators that quantify economics and financial benefits. This is not meant to be onerous. It is a necessary tool to ensure that the economy grows in an inclusive and sustainable way and the public policies implemented bear the intended benefits.