On November 1, the UK Financial Conduct Authority (FCA) published a new page on its website on using technology to enhance regulatory reporting, with respect to model driven machine executable regulatory reporting.
The FCA explains that one of the key technology areas on which it is focusing is the development of solutions to the increasing challenges faced by financial institutions in implementing their regulatory reporting obligations. It is exploring, with the Bank of England (BoE), how technology can be used to link regulation, compliance procedures, and firms’ policies and standards, together with firms’ transactional applications and databases.
If successful, the FCA believes a machine readable regulatory environment could “transform and fundamentally change” how the financial services industry understands, interprets and then reports regulatory information. Firms would be able to map their regulatory requirements directly to the data that they hold, which would, in turn, create the potential for automated, straight-through-processing of regulatory returns.
In the FCA’s view, this would benefit both firms and regulators by improving the accuracy of data submissions and reducing their costs; ensuring that changes to regulatory requirements could be implemented more quickly; and potentially reducing compliance costs, thereby lowering barriers to entry and increasing competition.
The FCA is hosting events designed to build on previous regtech initiatives and, with the BoE, will engage more broadly with the industry through a series of roundtables. Their findings will be progressively shared to assess both the potential of this work and how it can be implemented across the UK financial services sector.
The website is available here.