Participants at a recent Wolters Kluwer roundtable have revealed their Desire for Standardised Digital Model.
The company has released the findings of its industry roundtable on the Financial Conduct Authority’s (FCA) Call for Input on Smarter Regulatory Reporting. It found what appears to be a ‘real desire’ for a standardized Digital Regulatory Reporting (DRR) model, even if there is a realisation that this could prove to be elusive.
In response to the FCA’s call for input, Wolters Kluwer provided written recommendations and hosted a roundtable in June, bringing together 50 senior bankers, lawyers and consultants to discuss the concept of DRR with the regulator. The aim of the roundtable was to provide a forum to debate issues that could facilitate or impede the introduction of DRR.
It found that while straight through processing of regulatory returns is coming, a circuitous path remains as kinks get worked out.
In its DRR project, the FCA, in conjunction with the Bank of England, invited financial institutions to explore ways to work on these activities for the use of technology.
The idea is to open up the possibility of a model driven and machine readable regulatory environment according to the FCA.
“Now is the time to ask the tough questions when it comes to the future of DRR,” commented Claudio Salinardi, executive vice president and general manager of Wolters Kluwer’s finance, risk & reporting business.
“Most importantly, we need to ask what exactly will machines be asked to do? And we should ask whether they will be able to convey enough information accurately and consistently to bankers and regulators to permit them to draw the right inferences and insights about their institutions and the financial system, respectively.”
Participants broadly agreed that a standardised data model is the best foundation for a DRR system. However, there were reservations that one will be implemented, with some believing to 20 years being a realistic timeline.
Salinardi added: “Something more limited in scope was thought to have a better chance of success. A workable model that was intended to cover a certain regulatory scope, or that was created to apply in a single country, might be an easier bar to clear. It may also be the best starting point toward a more standardized data model.”
The roundtable also considered whether DRR could be implemented using a utilities model, in which relevant compliance and reporting obligations from a group of banks were ring-fenced, possibly to be outsourced to a third party. However, opinion was mixed.
Questions arose over whether digital reporting would be a significant advance on regulatory compliance and reporting as they exist today, and whether the promise of enhanced efficiency and reduced cost will be kept.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
