KPMG Singapore: Governance Gaps Slow Cloud RegTech Adoption

Governance gaps, rather than technical limitations, are hindering the adoption of cloud-based regulatory technology (RegTech) in Singapore and the wider Asia-Pacific region, according to a recent report by KPMG Singapore and the Singapore FinTech Association. The report surveyed RegTech firms, revealing that while 77% favor cloud-native deployment, a significant 94% encounter hesitancy from financial institutions.

The hesitancy stems from concerns primarily related to accountability, security controls, procurement processes, and internal skills, rather than issues with the technology itself. This suggests that the perceived risks and operational challenges are the key obstacles to broader implementation.

To address these challenges, the report recommends the development of shared standards, reusable assurance artifacts, and clearer mapping of roles and responsibilities between RegTech providers and financial institutions. These measures aim to build trust and streamline the adoption process.

Regulatory context is provided by the Monetary Authority of Singapore (MAS), which previously clarified its stance on cloud adoption. Guidelines issued in 2016 permit financial institutions to use cloud services, provided they implement robust governance and risk management frameworks. This indicates that the regulatory environment supports cloud RegTech, but operational and governance practices require enhancement for wider uptake.