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Quick and easy approach to reporting
Speed in delivering compliance reports
Characteristics of RegTech
Precision and consistency in reporting standards
Connectors across disparate data sources
construct individual data elements is an essential pre-requisite to providing accurate and timely reports to the regulator. The quality of the reports produced and the speed of its delivery is positively correlated to the ability to process data efficiently, and quickly. The evolution of Regtech has been accelerated also because of the need for quick, effective and accurate reporting tools that help banks meet with compliance deadlines. The 4 key characteristics of a good Regtech being Agility, Speed, Accuracy and Interoperability.
Unfortunately, most banks tend to see compliance reporting as an independent active from a tactical workaround model of a “point- solution” to address an immediate reporting requirement, than developing a holistic data-oriented approach. Multiple solutions would not only create duplication of data stores, systems and documentation, but also result in multiple “sources of truth” which is precisely the biggest cause of compliance nightmares. The critical takeaway therefore is to ensure there is a higher focus to ensure robustness of an unified data framework across the value chain – from the point of its capture to where it gets harnessed.
On another note, use of data is also a pre-requisite for driving innovation and testing new ideas. However, data masking is a key factor to bear in mind with any experimentation, as the breach of data is not just a regulatory challenge, but also a huge reputational risk. We are not even talking about the cyber-attacks or data leaks – this is just about complying with regulations such as GDPR, introduced in the EU. Investing in data masking and delivery process would be important.
Imperative #3. Convert Compliance as a competitive edge
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If adopted correctly, compliance could well serve as a competitive edge, and there are no surprises there if one could see this as a ‘first-mover’ advantage. Sensitivity to regulation compliance has a positive influence on process efficacy, technology effectiveness, rigour of governance and overall risk consciousness, across the organisation. And that can be quite helpful if applied constructively.
Reduction of costs in non-value adding activities that can be easily automated or reduction in duplication can help redeploy compliance resources for meaningful risk mitigation. For instance, when compliance reporting is constrained by semi-automated excel reports or error-prone manual files, it is an excellent opportunity to drive change and bring about an integrated, centralised technology solution with a long-term and holistic approach.
Banks that have embraced this principle, look to drive new ways of doing their business, with an active participatory model with the regulators, potentially having a positive influence on policy making too.
There may be an entirely different perspective to viewing the investments in compliance. In the process of building a substantial compliance and risk management framework, the opportunity loss with a sudden, unexpected impact is significantly minimised.
Pro-active approach to averting issues, if articulated well, will only enhance the valuation of any enterprise in the eyes of a shareholder, as long as it is tenable and in the realms of an acceptable order of magnitude. After all, every insurance policy does come with a premium!
Speed
Accuracy
Agility
Inter-operability
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