Here we are … always following new market developments to inform our product development teams … and one item caught my eye in the last week:– Digital Regulatory Reporting (DRR) starring the FCA and a host of collaborative partners! As Ronald Reagan noted having seen the film Back to the Future “Never has there been a more exciting time to be alive, a time of rousing wonder and heroic achievement.”
As we well know, every year firms (over 58,000 of them in the UK alone) and regulators face increased challenges around regulatory reporting with over 20,000 rules in operation. Currently, firms must interpret the rules and data requirements which sometimes leads to confusion, duplication and inefficiency. So after initial work on a proof of concept (FCA TechSprint 2016 through 2018) firms and regulators have come together to crack the nut of regulatory reporting and prepare for the future. It reminds me of the quote in the film “Where we're going, we don't need roads”. We will however need API’s……
Using Agile ways of working through the requirements of Policy, Legal, Analytics and Data a target-operating model was identified – DRR. This collaborative platform is connected to banks through Blockchain and API technology with the regulator sitting at the heart of the platform. Rules are transformed into code (Smart Contracts) with compliance checks completed in near real time and data available on demand.
The big upside to these developments, when the future meets now, will be that firms at minimal additional cost can meet regulatory reporting changes – a concept we heartily endorse here given the platform is to be built on open standards, allowing us to design a complementary solution as we embrace innovation in our Regulatory Reporter platform.
The next phase in this exciting project is to explore scalability and a proposal of a roadmap for implementation. As the FCA notes, “In order to move forward to a brighter future, collaboration is vital. It will only be achievable through working together. It’s not just time to look to the future. It’s time to bring it to us.”
Perhaps this project will allow us to “repair history” and set the date to releasing the billions spent annually on regulatory reporting to more beneficial innovations that truly help all our customers in this innovative financial industry!