Company insight
A radical rethink of regulatory reporting
Regulatory reporting is an unavoidable task and complex process that must be handled in an ever-evolving regulatory environment. But how can banks improve efficiency and compliance while reducing costs? Bodo Windmoeller, senior vice-president of product management at Regnology, and Maciej Piechocki, Regnology’s chief revenue officer, have the answer.
regulatory tsunami. From Dodd-Frank to Basel III, rules multiplied and the burden on banks to report to regulators became heavier. Since then, banks have spent money, time and effort to manage regulatory reporting and remain compliant with a changing set of rules – all for a process that delivers no competitive advantage. In order to refocus on their core competencies, banks are increasingly looking for ways to streamline the reporting process, and to improve their relationships with regulators, by leveraging technology and external expertise. “The financial crisis led to a quite massive increase in regulatory reporting and the exchange of data between regulators and the regulated financial institutions,” says Maciej Piechocki, chief revenue officer at Regnology. “What also followed, especially in recent years, was that regulators started to apply heavy penalties for non-compliance.” “Not only central banks and supervisory authorities, but also multinational bodies like the Basel Committee, realised that they have exposed economies, taxpayers and, indeed, financial institutions themselves to very, very high risks,” Piechocki adds. “The realisation that followed was that they need data to make much more informed decisions.” Regnology’s purpose is to rethink the regulatory burden on banks by bringing to bear its unrivalled experience in regulatory reporting and risk data aggregation, as well as a comprehensive product and service offering along the entire regulatory value chain for the financial services industry.
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hat followed the 2008 financial crisis and the collapse of Lehman Brothers was a
Maciej Piechocki, chief revenue officer,
Regnology
Standardise and industrialise Regnology exists to connect regulators with financial institutions. It acts as a global platform to gather and transfer data between regulators and regulated entities. In doing so, it contributes to financial transparency and stability through a unique product and service offering that encompasses consulting, managed end-to- end services and proprietary specialist reporting software to training. The company already supports 7,000 financial institutions and 50 regulators across the world. That includes some of the largest banks in Europe, leading insurance companies, central banks and supervisory authorities. Its regtech offering makes the processes for exchanging data between banks and regulators faster, more efficient and flexible enough to adapt to change. “We are, I think, still in the middle of the journey which started in 2008,” says Bodo Windmoeller, Regnology’s senior vice- president of product management. “Still, when you look at it from a regulator’s perspective, data is not real-time data and is not yet granular enough. The data quality is not high enough.
“When you talk to some regulators, they dream about this world where they sit in front of a kind of screen from Star Trek where they can see real-time flows of financial resources, like a weather app or a traffic app on a smartphone,” Windmoeller continues. “I think that we’re still a long way from realising that picture, and I think
Bodo
Windmoeller, senior VP, Regnology
that’s what is going to drive change in the next few years.”
At the moment, regulatory reporting is undergoing a process of standardisation and industrialisation. Piechocki likens this to the reinvention of the automotive industry over the past 30 years, which has changed what car manufacturers have retained in-house as their core capability, and what they outsource to specialist external providers.
“The results of this, as we know this from Japanese, German and American car manufacturers, was massive efficiency gains,” he says. “I was involved in a project in the early 2000s with a German car manufacturer about optimising how the whole supply chain worked. When a client bought a car in Europe, an immediate order was placed for tyre production in a plant in Brazil, which would then be sent to Europe to an assembly line that was digitalised. “Now, think about the cost and margin pressures that banks have these days,” he continues. “Think about the regulatory value chain. In the early 2000s, it was possible to order a car and immediately start producing a tyre on a different continent. If a regulator has a request for a new data point or a new data report today, it usually takes a few months – if not a few years – before the financial solution is able to provide this data to the regulator. We’re talking about digital data here, so it should be much simpler.”
Future Banking /
www.nsbanking.com
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