The fast-changing nature of regulatory reporting is placing ever-increasing burdens on financial institutions that must decide how to onboard and manage the data necessary for compliance.
The challenges don’t end there – firms must also decide whether they invest in the infrastructure to manage those new obligations or outsource to service providers, with the loss of control and oversight that entails.These were among the key points discussed by a panel of experts at the A-Team Group Data Management Summit in London. Under the heading ‘Reviewing the Regulatory and Reporting Landscape: The Data Management Response’, panellists explored how firms can not only manage their regulatory data more efficiently, but also mine greater value from it.
“The conundrum is changing,” was one comment on the way regulators were not only asking for more data but also more kinds of data.
One of the leading drivers of that change in Europe has been the UK’s severance from the European Union, often called Brexit. Panellist Jethro MacDonald, AI & ML product manager at SmartStream Technologies said the switch was causing all manner of headaches for compliance chiefs. Firms were finding it difficult to maintain their data and synchronise it between the diverging regulatory regimes in the EU and the UK.
Even four years ago, the regulatory landscape was unrecognisable from today, he said.
Colin Ware, regulatory product manager at BNY Mellon, and Steve Green, head of data EMEA at Sumitomo Mitsui Banking Corporation, argued that improving accessibility to data would aid in regulatory compliance and provide value for clients.
Additionally, this offers the tantalising prospect of systems that would enable regulators to enter firms’ databases and take the compliance information they need, removing the company’s obligation to report.
On the subject of innovative approaches and technologies that can address challenges faced by financial institutions, Neil Vernon, chief technology officer at Gresham Technologies, argued that outsourcing is a good solution.
Saying it is not necessary for firms to build up their own regulatory reporting tech stacks, Vernon argued that the data and processes for regulatory compliance have become so commoditised that it makes sense to entrust management of them to commodity providers. To do otherwise would be a waste of money.
With an audience poll finding that the biggest challenge to regulatory reporting was poor quality of the data, Raj Jethwa, data discovery solution specialist at OneTrust, suggested the problem may be one of firms failing to identify exactly what information they need. Before questioning the validity of their data, firms should first seek consensus on exactly what stakeholders require and what can drive value.
Vernon struck an optimistic note when he said focusing on poor data obscured the fact that companies were operating more efficiently because of good quality data, which can be found in ever-greater abundance.