DA-B DA-B Scope of Application
DA-B.1 DA-B.1 Introduction
DA-B.1.1
Digital financial advice , otherwise also referred to in common jargon as 'robo advice' or 'automated advice' has gained much popularity globally following advancements in technology. The provision of financial advice is a regulated activity under this Rulebook and the use of technology for providingdigital financial advice needs to be governed within the context of sound prudential and conduct regulations in order to safeguard the interests of clients. This Module sets forth the key requirements applicable tolicensees who wish to use adigital financial advice tool.Added: April 2019DA-B.1.2
The core of
digital financial advice tools is the algorithms embedded in the software. The algorithms use a variety of financial modelling techniques and assumptions to translate data inputs into suggested actions at each step of the financial advice value chain. For this reason, it is essential that the entire process is subject to a comprehensive governance and controls framework.Added: April 2019DA-B.1.3
Additionally, there are confidentiality and data privacy implications if the
digital financial advice tool uses the cloud for the analytics. If client data is processed by the tool using the cloud there must be safeguards to avoid noncompliance with applicable laws.Added: April 2019