The Financial Conduct Authority (FCA) has today announced that it is seeking views on how technology can make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide.
The FCA regularly explores how technology can make its regulations more efficient and reduce the regulatory burden on firms. One of the ways the FCA does this is through ‘TechSprints’ that bring together financial services providers, technology companies and subject matter experts to develop solutions to regulatory challenges.
In November 2017, the FCA and the Bank of England, held a two-week TechSprint to examine how technology can make the current system of regulatory reporting more accurate, efficient and consistent. All regulated firms submit data to the FCA based on their financial activities. The data received from these regulatory reports are critical to our ability to deliver effective supervision, monitor markets and detect financial crime.
At the TechSprint, participants successfully developed a ‘proof of concept’ which could make regulatory reporting requirements machine-readable and executable. This means that firms could map the reporting requirements directly to the data that they hold, creating the potential for automated, straight-through processing of regulatory returns.
This could benefit both firms and regulators. For example, the accuracy of data submissions could be improved and their costs reduced, changes to regulatory requirements could be implemented more quickly, and a reduction in compliance costs could lower barriers to entry and promote competition.
The collective demand on firms reporting regulatory data to the FCA is significant. Every year the FCA receives over 500,000 scheduled regulatory reports from firms, as well as additional ad hoc reports.
The Call for Input outlines how this ‘proof of concept’ was developed and asks for views on how the FCA can improve this process. The paper also seeks feedback on some of the broader issues surrounding the role technology can play in regulatory reporting.
Christopher Woolard, FCA’s Executive Director of Strategy and Competition commented:
Technology is a powerful shaper of financial regulation, able to make compliance simpler and more efficient. Our TechSprints bring people from across the financial services world together to share their collective knowledge to solve common problems. We look forward to working with industry participants in the coming months to drive these ideas forward.
The Call for Input will close on 20 June 2018. The FCA will publish a feedback statement summarising the views received and the proposed next steps in Summer 2018.