In the last blog, we discussed what is Financial Regulatory Reporting and its importance in the banking industry. Regulatory Reporting comprises the submission of business numbers as required by regulators to evaluate and track the financial and operational status of financial institutions and their compliance with required regulatory provisions.
Whenever a Regulator brings in new requirements, banks have to go through various stages to finally deliver what Regulators are asking for.
Let's go through various stages of implementing new regulatory requirements.
Interpretation of new rules:
Reviewing and establishing what the regulation means for the firm, translating the regulatory requirements into IT requirements, any associated staff training, and validation processes. Scoping needs to be done at this stage. We need to understand the regulatory rules and guidelines as well as identify interdependencies with other major regulations. We have to assess the impact of the rules on our strategic priorities and operations.
Data Preparation:
Sourcing and integrating data from different systems and reviewing for completeness and accuracy. Identifying stewardship of data and Frequency of data required is also important. The top challenges for banks are:
1.Data availability
2.Data quality
3.Infrastructure and IT capability
Fig 1: Stages of New Regulatory Reporting Implementation |
Report Production:
Transforming data by applying the appropriate calculations and business rules, checking for and resolving errors, and aggregating data to input data to each reporting cell in templates before signing off the report for submission. Banks can use third-party tools like AxiomSL, OneSumX, or any in house tool for Report production purposes.
Communication:
Transforming reports into the format required for submission and sending the output to regulators. Sometimes the Regulators ask to send granular data in XML, XBRL, or in Excel Sheets. Gabriel is the FCA's online system for collecting and storing regulatory data from firms while OSCA (The online statistical collection application) is used by reporting institutions to submit statistical data to the Bank of England.
Queries:
Handling both internal queries prior to submission as well as queries received from regulators after submission. Banks need to reply to any ad-hoc queries by regulators as well as internal assessment bodies. So Regulatory team always need to be prepared to furnish data point in a stipulated time period.
Regulatory reporting is an ongoing process where banks need to interact with their counterparts and submit qualitative, accurate data with timeliness.
About
Amlgo Labs : Amlgo Labs is
an advanced data analytics and decision sciences company based out in Gurgaon
and Bangalore, India. We help our clients in different areas of
data solutions includes design/development of end to end
solutions (Cloud, Big Data, UI/UX, Data Engineering, Advanced Analytics
and Data Sciences) with a focus on improving businesses and providing
insights to make intelligent data-driven decisions across verticals. We have
another vertical of business that we call - Financial Regulatory Reporting for
(MAS, APRA, HKMA, EBA, FED, RBI etc) all
major regulators in the world and our team is specialized in commonly used
regulatory tools across the globe (AxiomSL Controller
View, OneSumX Development, Moody’s
Risk, IBM Open Pages etc).We build innovative concepts and then
solutions to give an extra edge to the business outcomes and help to visualize
and execute effective decision strategies.
Please
feel free to comment or share your views and thoughts. You can always reach out
to us by sending an email at info@amlgolabs.com or filling a contact form at the end of the
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