FCA launches call for input on the use of technology for smarter regulatory reporting
The UK’s Financial Conduct Authority (FCA) has 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 regulations more efficient and reduce the regulatory burden on firms. One of the ways of doing this is through its ‘TechSprints’, which 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. Regulated firms are required to submit data to the FCA based on their financial activities, so that the FCA can deliver effective supervision, monitor markets and detect financial crime.
At the TechSprint, participants 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, the FCA said in a statement. 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.
Christopher Woolard, FCA’s Executive Director of Strategy and Competition said: “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.”
Guy Kirkwood, chief evangelist at New York-based robotic process automation vendor UiPath, explained that robotic process automation is already having an impact on the way financial institutions meet regulatory requirements. “These organisations have large teams dedicated to complying with a raft of regulations, much of which involves analysing large amount of data from various business lines and systems. The growth of robotics is helping to automate manual tasks and provide higher levels of accuracy and enhanced productivity. The future development of intelligent robotic process automation may be able to further replicate human decision-making and further disrupt financial compliance.”