Conflicts of Interest

The Financial Conduct Authority (FCA) recently launched a call for input, asking how financial services providers believe using technology could ease the burden of filing regulatory reports while simultaneously improving the quality of reported information. With more than 500,000 scheduled plus additional ad hoc regulatory reports submitted to the FCA each year, changes to the reporting process could have a significant impact.

Firms subject to FCA oversight have until 20 June 2018 to provide input, which the FCA will then summarise with the views of other respondents in order to publish a feedback statement and propose further action.

November 2017 TechSprint Identified Opportunity to Leverage Compliance Technology

In its ongoing efforts to increase the efficiency of regulations while decreasing the burden of those regulations, the FCA utilises a variety of methods to connect with financial services providers, including holding “TechSprints” where subject matter experts, financial firms, and technology providers can come together to propose process improvements.

At the November 2017 TechSprint, the FCA’s fourth, participants explored the potential impact of model-driven, machine-readable and executable regulations and proposed a “proof of concept” for such a framework. This proof of concept is further outlined in the Call for Input, which asks for opinions and views on how the FCA can improve regulatory reporting.

How Improving Technology Would Aid the FCA

The FCA relies on the information financial services firms submit to detect potential financial crimes, supervise firms, and monitor investment markets.

If financial firms were able to automate their regulatory reports, the accuracy and reliability of reported information would be improved. In addition, automating regulatory reporting would also help ensure data reported to the FCA was complete. The FCA would, in turn, be better able to rely on submitted data. In addition, as regulatory requirements change, it would be simpler to implement such changes.

Potential Benefits to Financial Services Firms

Automating regulatory reporting would also benefit firms by creating efficiencies and lowering the cost of reporting, as well as the overall cost of compliance. This, in turn, could make it easier for new firms to begin operations, promoting competition.

For compliance officers who are already leveraging technology to manage other aspects of their compliance programmes, automating the reporting process could further streamline internal operations and allow for better allocation of resources.

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