Regulatory IT for the Digital Asset & Custody Industry
Between Necessity, Challenges and Future Prospects
The rapidly growing Digital Asset & Custody industry is facing increasing regulation, specifically characterised by Dora, MaRisk, BAIT and BaFin. In this article, we take a comprehensive look at the necessity, the complex challenges and the promising prospects of regulatory IT in this evolving sector.
Need for regulatory IT
The need for a strong regulatory IT architecture in the digital asset & custody industry is based on the complexity and sensitivity of digital assets. Dora creates the framework for digitalisation, MaRisk sets minimum standards in risk management, BAIT specifies the IT requirements and BaFin monitors compliance with these requirements. A solid IT infrastructure is therefore crucial for effectively managing digital risks and meeting regulatory compliance requirements.
Challenges in construction and operation
Setting up and operating such an architecture is not without its obstacles. The adaptation of existing systems, the integration of blockchain technology, the continuous compliance with changing regulations and the consideration of regulatory dependencies when outsourcing banking transactions require expertise and resources. Roles such as compliance managers, IT security experts and outsourcing management experts are becoming indispensable.
Required skills and roles
The skills and roles required are wide-ranging. Compliance managers must keep an eye on regulatory requirements, IT security experts must ensure a secure infrastructure and outsourcing management experts must take regulatory dependencies into account. In addition, blockchain developers are needed to successfully integrate this technology.
Focus on security
The security of digital assets is at the centre of any regulatory IT architecture. Modern security protocols, encryption and continuous monitoring are essential to minimise potential security risks and strengthen the trust of all stakeholders.
Challenges in setting up a blockchain architecture
The integration of a blockchain architecture poses a particular challenge. Decentralisation, smart contracts and the management of private keys require an in-depth examination of technical, legal and operational aspects. The DLT Pilot Regime provides guidance on how blockchain can be integrated into regulated environments.
Blockchain integration into regulatory IT
The seamless integration of blockchain into the existing regulatory IT landscape is crucial. Frameworks such as the DLT Pilot Regime provide a clear guideline on how blockchain can be embedded in a regulated environment. Collaboration with regulators is becoming increasingly important.
Despite the challenges, regulatory requirements present an opportunity to improve security and efficiency. By utilising skilled staff wisely, applying security best practices and integrating blockchain technology, companies can not only meet regulatory requirements but also strengthen their position as pioneers in the digital asset & custody industry.
Regulatory IT for digital assets is not just a regulation, but a strategic investment. Organisations that proactively address these challenges will not only ensure compliance, but also create a foundation for sustainable growth and innovation. By integrating blockchain technology and regulatory compliance, the digital asset & custody industry will become a more secure and efficient financial sector for the future.