The current regulatory reporting process is largely manual and very complex - it has over 20,000 rules across nearly 60,000 firms. It is up to each firm to interpret these rules and the data requirements and when they are asked to provide data to the regulators, the different ways they each interpret these rules cause confusion, duplication and inefficency, which take time and money to resolve.
The FCA receives over 500,000 scheduled regulatory reports every year. These reports cost firms up to £4 billion to create and the data included in them is not always good enough for regulators to use. The Digital Regulatory Reporting (DRR) project will involve regulators and firms investigating how the regulatory reporting process can be improved and which parts can be automated.
The process review aims to streamline and simplify the process as part of its Modernising Reporting Instructions. This involves a review of data collection and the definition and adoption of common data standards. There is also a review into ways to improve policy writing and reporting instructions so that the PRA's Rulebook can be made machine readable.
The process will be automated by using Blockchain and API technology to connect the regulators to the firms. The majority of regulatory rules will be digitised into code so that financial firms' data can be transferred on demand to the regulators, removing the need for the firms to perform any manual interpretion of the request. As regulators create new rules, the DRR project will code them in the new platform, thereby helping to future proof firms who won't need to worry about providing additional data manually.
As regulators create new rules, the DRR project will code them in the new platform, thereby helping to future proof firms who won't need to worry about providing additional data manually.
The new data collection platform RegData (which replaces the FCA's Gabriel system) will make it easier for 52,000 firms to submit their regular regulatory submissions. The FCA say that RegData is key to its overall Data Strategy which will "harness the power of data and advanced analytics to tranform regulation."