The Prudential Regulation Authority (PRA), which regulates and supervises financial services firms as part of the Bank of England, is planning to complete its RegTech and data integration strategy by 2026, bringing in a package of change including a new ‘look and feel’ to regulation, and refinements to what data is collected, how it is collected, and how it is used.
The work programme for change incorporates lessons learnt before Brexit and during the Covid-19 pandemic, and includes a major project dedicated to regulatory reporting.
Putting these plans in context, in 2021, the bank responded to its initial 2019 Future of Finance report with a focus on developing a world-class RegTech and data strategy. Since then and moving the strategy forward, a PRA review set the objectives of making the most of data and technology, modernising the bank’s strategy, and achieving a step change in its efficiency and effectiveness.
The strategy has three prongs – what data is collected, how it is collected, and how it is used. The guiding principles of data collection are to collect only data that is needed to support supervision. On how data is collected, the Transforming Data Collection initiative being overseen by the bank and the Financial Conduct Authority (FCA) is identifying new methods of data collection and how to get required data at the lowest cost to the industry. On data use, the aim is to make sure the bank uses all the data it collects well and achieve automated signal extraction to provide early warning of any potential market problems.
Projects supporting the use of data include dashboards for data visualisation using Tableau and Python, transforming authorisation to improve data ingestion and use, machine learning-based text analytics to read unstructured data, a data science project on neural networks, producing early warning indicators, and a digital skills programme to upskill employees and exploit data opportunities.
These projects are designed to ensure that, by 2026, regulatory reporting is complete timely and accurate, a customisable supervisor dashboard with a single view of data is available, and the bank has the ability to probe issues and potential risks.
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