The UK’s Financial Conduct Authority (FCA) has today announced a ‘Call for Input’ on using technology to achieve smarter regulatory reporting.
The FCA is responsible for a number of rules and requirements that those operating in financial markets, such as institutions or advisors, need to obey. These rules and requirements in turn necessitate a large amount of reporting back to the FCA to ensure compliance with them and to provide data that the FCA requires.
Reporting can be a resource intensive process with the FCA estimating that it receives 500,000 regulatory reports each year on top of any additional ad hoc reports. Unsurprisingly, both the regulator and industry are keen to keep the cost and complexity of this process to a minimum. To that end, the FCA has been exploring ways that new technologies could help automate and simplify reporting.
One of the key areas the FCA has been examining is the potential for machine-executable rules. These FCA rules would be in a format that could be read by a computer, allowing it to automate a process that pulls together the relevant material without the need for human interpretation and manual collation. The FCA held a “TechSprint” toward the end of last year which developed a proof of concept and is now seeking views on how to build on the work done so far to begin developing a full proposition.
Antti Lemberg, an Associate Director in Frontier’s financial service practice said “While innovations in regulatory reporting might sound like a dull topic, it is one that is of vital interest to a large number of financial services providers and their customers. Rules and regulations are in place for a reason, but the costs to administer them can be significant. It has been estimated that up to a quarter of financial services employees are involved with regulatory compliance management. Any steps taken by the FCA and industry that deliver significant efficiencies would be a major cost saving that customers should in turn benefit from.”
Frontier advises on these and other financial service regulatory issues.
For more information, please contact Saskia Nett on email@example.com or call +44 (0)20 7031 7000.