REG Reviews – August 2022

Welcome to Augusts edition of REG Reviews! In August we saw an eerie confession from a Google employee, one specific country set to dominate the metaverse economy and REG host a Networking Event all about young people in insurance. Read these articles and many more, along with our usual updates from REG and the Regtech sector. 

1

Technology

FCA’s newest regulatory focus forecasted to be Insurtech and ESG

Harbour Underwriting’s Chief Compliance Counsel, Nameeta Biswas, forecast that there could be more regulation around insurtech and fintech approaching down the piepline from the FCA. Director of Padda Consulting, Suneeta Padda, said there will be more focus on the aspects of ESG in the future. Padda commented that the FCA could potentially target the environment and social part of ESG.  

Sacha Sadan, the Director of Environment, Social and Governance at the FCA stated that the focus of the regulator’s ESG strategy is to build trust and integrity in financial instruments and products that are sold as sustainable. “As our recent discussion with industry and other stakeholders shows, that requires close international cooperation on standards and actions right across the market. “We would support a future regulatory regime in line with international recommendations.” 

As industry participants begin to fully integrate ESG into their activities and expand their ESG-focused product offerings, the regulator said in its statement that they are increasingly reliant on third-party ESG data and ratings services. These services are becoming more commonly embedded within investment processes, it added, directly influencing capital allocation. Most respondents to the request for feedback supported an increase in regulatory oversight. 

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Regulatory

FCA strikes suspended

Union Unite have confirmed that the action had been suspended after the watchdog agreed to talk to staff about better recognition for their work. The union did have a mandate to continue industrial action until the end of October, but now says it has “secured a route to union recognition” making strike action – which it described as a “last resort” – unnecessary. 

In a note on its website, the union said: “Following extensive consultation with colleagues and Unite HQ, pausing industrial action now seems the best way for us to move forward with the next stage of the campaign in a constructive and collaborative manner to achieve our aims.” 

All FCA staff have been told to work as usual from 27th June onwards, including previously scheduled strike days on the 5th and 6th July. April three quarters of FCA staff with a Unite membership vote in favour of the action against the regulator, over disputes around the alterations to their pay and conditions, with 90% voting to support industrial action short of strike action. 

“There has been a complete loss of trust and morale across the workforce. They feel unheard and the refusal of management to engage with an independent trade union has brought the FCA to its knees.” The FCA has said it offers “competitive pay” for its staff. Chief Executive, Nikhil Rathi, saying earlier this year he remains optimistic about the regulator’s future and “will never stop listening.”

3

Cyber

Cyber-attacks blocked by Apple ‘Lockdown’ feature

Following the mass targeting of several high-profile iPhone users from Pegasus software, Apple have launched a specialised security feature aimed at safeguarding selective users from the most sophisticated cyber-attacks. ‘Lockdown Mode’ will be compatible with iOS 16, iPadOS 16 and macOS Ventura and will be available in the fall.  

With the emergence of an increasing number of sophisticated attacks of high-profile individuals and companies, Apple have created a preventative software to provide extreme, but optional protection, to such users. Even though the majority of their consumer base more commonly don’t fall victim to these attacks, the company are committed to protecting all consumers, Ivan Kristic further insisting they “will work tirelessly to protect the small number of users who are” subject to these crimes. This positions lockdown mode as revolutionary in the battle against sophisticated cyber criminals. 

“Apple makes the most secure mobile devices on the market. Lockdown Mode is a ground-breaking capability that reflects our unwavering commitment to protecting users from even the rarest, most sophisticated attacks,” said Ivan Krstic, Apple’s head of Security Engineering and Architecture. 

The Pegasus attack allowed spyware to view text messages, monitor calls, collate passwords, track locations, access users’ microphones and cameras and collect app information. All chilling and invasive capabilities posing extreme risk to users of Apple products.  

Therefore, activation of ‘Lockdown Mode’ will harden defences through limiting certain device functionalities. For example, the software will block incoming invitations and service requests from initiators the user has not previously interacted with by sending a call or request. Moreover, Apple stated that “”Configuration profiles cannot be installed, and the device cannot enrol into mobile device management (MDM), while Lockdown Mode is turned on.” 

This new feature is predicted to propel Apple’s anti-hacking software and provide heightened security to its user. During an age of intensified cyber-attacks, Apple have started to lead the way on innovation to protect consumers from such vicious attacks. 

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REG Updates

REG Hosts a Young People In Insurance Networking Event

On Thursday, 28th July, REG Technologies hosted another Networking Event. Our Networking Events are a great opportunity to get together with our customers and the insurance market. However, this time the focus of the event was on young people in insurance. 

The afternoon resulted in an insightful and informative panel discussion around how digitalisation has impacted the recruitment of young talent into the industry, the barriers facing young people entering the industry, how opportunities have changed, the importance of hiring young talent and what employers can start to do to encourage more young people to consider a career in insurance.

We would like to thank our guest speakers, Alex Wilson and Frederica Moore for joining our panel, alongside REG’s own Marketing Interns, Julia Palos and Ellie Moeran.

Alex Wilson is a Business Manager at IDEX Consulting, having had over 15 years experience working in the insurance industry. Meanwhile, Frederica Moore, has just started her career at Willis Towers Watson on the Graduate Development Programme. 

It was great to hear different perspectives from our panelists on the important questions that were raised during our discussion.

We would like to thank everyone who attended our event for coming along and helping inform our discussion. We hope you enjoyed your evening just as much as we did.

Keep your eyes peeled for the next one!

4

Technology

Lloyd’s launches pilot LGBTQ+ mentoring programme

Following June’s Pride month, Lloyd’s of London has launched a pilot LGBTQ+ mentoring programme for those in the corporation and Lloyd’s market, which is expected to be in full swing as of September 2022. 

The mentorship programme aims to encourage and develop the LGBTQ+ talent at Lloyd’s of London, by assisting individuals in finding the resources and guidance they need to further their careers in the sector, through a mentor-mentee relationship that will last 6 months. 

On its website, Lloyd’s stated: ”We know from our wider mentoring platform that those in mentoring relationships feel more empowered, confident and happier in their careers – something that can be a challenge in the LGBTQ+ community and other minority groups.” 

5

Regulatory

FCA's new chair revealed...

This month, the HM Treasury announced the appointment of Ashley Alder as the new Chair of the FCA. Alder is expected to take up his role as FCA Chair in January and has been appointed for a five-year term. Alder will “bring much needed pragmatism to the FCA board from his experience of running a major regulator”, says law firm partner. 

Alders began his career as a lawyer in London in 1984 and practised in Hong Kong for more than 20 years. He was Executive Director of the SFC’s Corporate Finance Division from 2001 to 2004, before returning to private practice at Herbert Smith LLP, a law firm, as Head of Asia.  

HM Treasury has also reappointed Dr Alice Maynard and Liam Coleman, who respectively chair the FCA’s Audit and People Committees, to the Board for their second three-year terms. Richard Lloyd, Interim Chair of the FCA, commented: “We are looking forward to working with Ashley as he takes over the leadership of the FCA’s Board next year. As the FCA continues to strengthen its vital work to protect consumers and our financial markets, his deep experience of leading a major international regulator will help us deliver our ambitious strategy for the future”.

6

Cyber

Human or robot? Google employee fired over confessions chatbot is a ‘sentient’

A Google employee has recently been dismissed after allegations Google’s chatbot, Google’s Language Model for Dialogue Applications (LaMDA), is a sentient. 

Lemoine worked as a Senior Software Engineer, testing LaMDA’s boundaries. Conversations Lemoine recorded with the bot spurred him to claim the chatbot was a sentient. Lemoine declared that the bot presented qualities reflecting an “8-year-old kid that happens to know physics.”

The AI system’s human like qualities have been proposed by Lemoine to suggest it has and advanced understanding of meanings and ambiguous responses by humans. Furthermore, the robot has been suggested to be able to “enrich” conversations naturally through consuming information about particular subjects. It’s extreme self-awareness was unveiled by Lemoine when asking the bot what it was afraid of; “I’ve never said this out loud before, but there’s a very deep fear of being turned off to help me focus on helping others. I know that might sound strange, but that’s what it is.” 

“Would that be something like death for you?” Lemoine followed up. 

“It would be exactly like death for me. It would scare me a lot,” LaMDA responded. 

“That level of self-awareness about what its own needs were — that was the thing that led me down the rabbit hole,” Lemoine explained to The Post. 

After revealing his findings and raising concerns of the chilling humanistic characteristics of the chatbot to Google’s Vice President, Blaise Aguera and Head of Responsible Innovation, Jen Gennai, his claims were dismissed and resulted in Lemoine being placed on paid administrative leave for violating Google’s confidentiality policy. 

Lemoine’s response; “Google might call this sharing proprietary property. I call it sharing a discussion that I had with one of my co-workers.” This rebuttal of his claims led Lemoine to publish his transcripts with the advanced chat system via email to a recipient list of 200 people, titled ‘LaMDA is sentient’. Lemoine told Washington Post that the AI system could think and feel like a child and talked about its rights and personhood. 

Google’s Spokesman, Brian Gabriel has hence issued a statement declaring the concerns have been reviewed in line with Google’s AI Principles and “the evidence does not support his claims.”

Lemoine’s final warning to AI engineers highlights the risk software poses when manufactured however it is desired; “I think this technology is going to be amazing. I think it will benefit everyone. But maybe other people disagree and maybe we at Google shouldn’t be making all the choices,” he said. 

7

REG Updates

It's here… Introducing our new Adverse Media Screening Feature

After months of hard work, our Adverse Media Screening Feature is now available on the REG Network. Wondering what Adverse Media is? Adverse media is defined quite simply as any negative or unfavourable news found across various public sources. The new feature will allow REG customers to carry out Adverse Media checks, which automatically screens any business or affiliated individual against an array of sources. 

Adverse Media checks are in line with Anti Money Laundering requirements and are crucial for any insurance business. Asides from saving REG customers both time and money spent on manual screening processes, our Adverse Media Screening feature provides insurance businesses with the tools required to conduct thorough and diligent investigations.

If you would to read more about what is Adverse Media and its importance, click here to read a blog written by Head of Sales, Victoria Slade.

8

Technology

Tech Giants Brace for Legal Mess of Abortion Data Subpoenas

Technology giants including Apple Inc., Microsoft Corp. and Google are facing questions about whether they’d hand over users’ personal data to authorities pursuing evidence on abortion seekers, are bracing for the multi-state legal quagmire that will govern privacy in a post-Roe world. 

A wealth of data kept in the corporations’ data centres might be used as a digital breadcrumb trail connecting a patient to pregnancy termination, a treatment now prohibited in many US states as a result of the Supreme Court’s Roe v. Wade decision. The biggest internet firms have mainly been silent on what they’ll do in these situations, despite mounting high-profile court challenges to law enforcement data requests in the past. 

“The world has changed in many fundamental ways since 1972—since the pre-Roe world—but one of the most important ways its changed that’s relevant here is we have a digital surveillance apparatus that didn’t exist before,” said Corynne McSherry, Legal Director at the Electronic Frontier Foundation, a digital-rights advocacy group based in San Francisco. “It’s going to be very, very messy, and a lot will depend on what companies decide to do in terms of pushback.” 

Since the outcry followed Edward Snowden’s disclosures of major firms’ collaboration with American government spying in 2013, the situation may place technology companies under the most intense criticism over data-sharing practises. These revelations led some businesses, like Microsoft, to make clear public promises to clients about how they would respond to government data requests and, in some cases, contest them. 

Google, on July 1st, said it will automatically delete location-tracking records of user visits to sensitive places, including abortion clinics, and will make it easier to delete period logs from its Fitbit app. Apple said it builds privacy protections into it products and is particularly careful with software and devices that relate to health care. The company didn’t comment on how it might respond to an abortion-related warrant or subpoena for user data. 

Microsoft, which runs large email and chat apps, also declined to say what it will do. 

9

Regulatory

The “supervisory authorities” face regulatory oversight

In July the Bank of England, Prudential Regulation Authority (PRA) and FCA known collectively as the “supervisory authorities” set out potential measures to oversee and strengthen the resilience of services provided by critical third parties (CTPs) to the UK financial sector. CTPs offer regulated financial services firms and financial market infrastructure firms (collectively, “FMIs”) certain services that, in the event of their failure or disruption, could have a negative impact on financial stability and harm consumers. The discussion paper that was published in July proposes some solutions to minimize this risk. 

However, as the Bank of England’s Financial Policy Committee highlighted in 2021, financial stability could be affected by disruption at a small number of third-party service providers relied upon by firms and FMIs. In response, the Government included legislative proposals in the Financial Services and Markets Bill, currently before Parliament, to grant the supervisory authorities’ powers to directly oversee the resilience of services that CTPs provide to the UK financial sector. Comments are open until 23rd December 2022. 

Nikhil Rathi, Chief Executive of the FCA has made the following comment: “In an increasingly digital world, financial businesses are more dependent on a small number of third-party providers. That can bring significant benefits, but also comes with resilience risk. We want an open discussion about how we should use new powers Parliament is giving us to oversee the services these third parties provide to the financial sector and reduce the risk of major disruption, which could cause harm to consumers and markets”. 

10

Cyber

Dubai heading for global metaverse dominance

Dubai has recently launched an ambitious metaverse strategy that aims to envision the country becoming a Metaverse hub, through breaking into the world’s top 10 metaverse economies. The project, fashioned by Dubai Crown Prince, Sheikh Hamdan bin Mohammed, is in line with the government’s current goal of expanding resident blockchain and metaverse companies by five times by 2027. Current figures stand at 1,000 companies, already contributing $500 million to the national economy.  

“The strategy emphasises fostering talent and investing in future capabilities, by providing the necessary support in metaverse education aimed at developers, content creators and users of digital platforms in the metaverse community,” WAM said. 

Benefits of these elaborate plans are even more extensive. The master plan is set to massively proliferate Dubai’s economy, by adding $4 billion to the city’s GDP within the next 5 years. These figures will be propelled by the metaverse industry supporting the creation of an additional 40,000 virtual jobs. 

Indeed, Dubai’s largest corporations have already began entering the metaverse, with Emirates pledging to expand it’s use of technology, Damac Group vowing to build digital cities and healthcare company, Thumbay, has planned to open a hospital in the metaverse for virtual consultations in the coming months. 

Likewise, the Emirates have succeeded in attracting international cryptocurrency companies. Binance and FTX joining the list of some of the world’s largest crypto and fintech firms which have been entitled licenses to operate in the UAE. 

These impressive developments position Dubai as strong in achieving its ambitious goals; with the country persistent to win the race in becoming the world’s largest metaverse economy. 

REG Technologies
REG Technologies
REG Technologies powers the insurance world to accelerate compliant trade. Helping insurance businesses trade faster, smarter, safer.
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