Navigating the complexities of EMIR REFIT reporting: A cost-benefit analysis

Navigating the complexities of EMIR REFIT reporting: A cost-benefit analysis

In the ever-evolving landscape of financial regulations, staying compliant is more critical than ever. The European Market Infrastructure Regulation (EMIR) and its forthcoming amendments, known as EMIR REFIT, introduce significant changes to reporting requirements. These modifications, aimed at harmonizing with international standards set by IOSCO-CPMI, bring about increased data granularity, the introduction of new fields, and expanded reconciliation demands, among other updates.

Map FinTech, a one-stop RegTech provider, has delved into the EMIR regulation and the costs to compliance. 

The transition to EMIR REFIT is not merely an update but a comprehensive overhaul that introduces new complexities. Reporting entities must enhance their Information Technology, Risk, and Compliance capabilities to digest the extensive standards and rules effectively. The aim is to facilitate a seamless transition, ensuring that all reporting is accurate, timely, and fully compliant from day one.

The Debate: In-House vs Outsourced EMIR REFIT Reporting

While the allure of controlling sensitive financial data and perceived immediate cost savings may tempt firms to manage EMIR REFIT reporting in-house, this approach warrants a thorough cost-benefit analysis. The direct and indirect costs, spanning from human resources to technology and beyond, can accumulate, overshadowing the initial advantages.

Deciphering the Financial Implications of In-House Reporting

The financial spectrum of DIY EMIR REFIT reporting is broad. From the tangible expenses of human resources, technology, and reporting fees to the intangible efforts required across multiple project phases, each aspect contributes to the overall cost. Notably, the human resource component, encompassing various specialised roles, presents significant financial and logistical challenges. Furthermore, the technological investments required for compliance, such as migrating to XML formats following the ISO 20022 methodology, amplify these costs. Additionally, the effort and time investment, spanning from preparation to post-implementation, cannot be overlooked, highlighting the intensive nature of in-house reporting initiatives.

Beyond Financial Costs: Other Considerations for In-House Reporting

Control, flexibility, data privacy, reluctance to change, and the belief in internal expertise are among the factors driving firms towards in-house EMIR REFIT reporting. However, these considerations must be balanced against the benefits of outsourcing, including access to specialised expertise, cost efficiency, and enhanced compliance capabilities.

Conclusion: The Case for Outsourcing EMIR REFIT Reporting

With the majority of B2B decision-makers leaning towards outsourcing critical services, the argument for externalising EMIR REFIT reporting becomes compelling. The combination of high financial, time, and expertise costs associated with in-house reporting underscores the advantages of engaging a seasoned service provider. Outsourcing not only offers a cost-effective solution but also ensures adaptability to regulatory changes, leveraging external expertise for ongoing compliance.

MAP FinTech stands ready to guide firms through the EMIR REFIT reporting maze, offering innovative solutions tailored to the unique needs of each organization. For more information on how we can assist your firm in adapting to these regulatory changes, contact our team of experts today.

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