Should RegTech Focus on Technology or Principles?

WOCCU Vice President of International Advocacy Paul Andrews on Wednesday hosted the final two of seven breakout sessions focused on advocacy and regulatory issues at WCUC 2025.

One of them focused on the intersection of regulation and technology in the financial services sector, with much of the conversation revolving around whether regulations should be applied to specific technological tools or focus more on overall principles.

David Heine, CEO of Regional Australia Bank, said technology is simply changing too fast to focus regulations on specific tools.

“You can’t nail it down and regulate a specific version (of a tool). I mean, how many different versions of AI do we all have on our phones? You can’t treat it from that point of view,” said Heine. “There are some weaknesses in a principles-based approach, of course. It becomes gray for practitioners to understand, necessarily, what the outcome is and what you’re trying to drive toward, but we’re left with no choice, in my view.”

But even on a principles level, the panel agreed regulators must take a wholistic approach to technology.

“In policy terms, there’s a triangle. And, if you’re a policymaker, you often have various objectives you want to pursue. You may want to pursue competitiveness and effectiveness, and performance— and that’s a very valid objective. But you may also want to pursue privacy protection—very important,” said Peter Kerstens, Technology Adviser for the European Commission. “But if you go to purse one of these objectives to the extreme, the two other objectives are going to suffer. And that’s why policymakers—in my view—have to try to place themselves somewhere in the middle of the triangle.”