What do you get when you put some of the best minds in the regulatory and transaction reporting industries in a room together?
A can’t-miss discussion tackling the biggest regulatory reporting questions of 2021. And that’s exactly what our recent webinar offers. There’s a real focus on the pressure firms face from increasingly demanding regulatory reporting regimes coupled with the need to ‘do more with less’.
Getting compliance right has never been an easy task, but it doesn’t have to be a burden, either. Neil Vernon, CTO at Gresham Technologies, hosts a discussion with…
• Chad Giussani, Head, FM Compliance, Transaction Reporting, Standard Chartered Bank
• Brett Utnick, Director – Head of Regulatory Services, BMO Financial Group
• Philip Flood, Business Development Director, Regulatory and STP Services, Gresham Technologies
… to understand how firms can refine their regulatory reporting systems and strategies, drive business-wide efficiency, and manage costs against a challenging backdrop of regulatory change and the ongoing global pandemic.
Plan for the unexpected
One of the key themes was the number of unknowns the regulatory reporting sector - like other industries- is facing. Aside from obvious pandemic related uncertainty, firms are having to contend with potential regulatory divergence between the UK and EU. This has already occurred with the Securities Financing Transactions Regulation (SFTR) go-live date, with the UK choosing to defer implementation of the final phase. The new administration in the US was highlighted for its sharply contrasting attitude towards regulation with that of the previous regime, as was the unpredictable state of global affairs and implications for macro-economic and trade policies.
Against all of this, firms still have regulatory deadlines to meet, including Consolidated Audit Trail (CAT) phases and MAS regulatory reporting requirements, as well as potential updates to EMIR REFIT, MiFID, Dodd Frank and TRACE. The panel concluded that in this time of great uncertainty, robust infrastructure and processes are of paramount importance, as is an understanding of how these fare under stress and where your weak spots might be. With teams across the globe still working from home, there was also an acknowledgement that reliable systems and clear, well documented processes are essential for successful communication and collaboration.
Regulatory reporting grows up
While the operating environment has required some adaptation, there was a sense that regulatory reporting itself is now in a more mature space. Trade associations and working groups sprung into action during the early phases of large-scale regulatory change, but lack of clarity and complexity meant that consistency was still hard to come by. The pace of change has not slowed and high levels of uncertainty remain. However, it’s led to a shift in how financial institutions think about reporting – a holistic view is crucial throughout challenging periods, and stepping back to consider how a flexible approach and scalable, automated solutions can increase efficiency is key to remaining agile and innovative. There is also a greater sense of consistency from the regulators’ side with the adoption of the common ISO 20022 standards providing a standardised language across many regulatory regimes.
Refocus on organisational structures
This isn’t to say that the reporting complexity firms have been dealing with over the past ten years or so is likely to go away – far from it. The challenge is that this complexity can often be underestimated by the business, leading to queries about why projects are taking so long to implement. This sparked a discussion about how organisations are choosing to structure and deploy their internal teams. There was a general sense that matrix structures which allow resources to collaborate around operational and regulatory specialisms are particularly useful. The importance of working with specialist partners who can support your efforts in this space was also highlighted. With regulatory initiatives so complex, it is important to be able to bring in detailed, focused knowledge and skills where required.
More data, no problems
While financial institutions are being asked to stretch their resources to address rapidly rising costs of compliance, they are also facing the question of how the vast amounts of data collected for regulatory reporting activities could support intelligent decision making and business activity. There was discussion of architecting this capability into systems from the ground up and the point was also made that connectivity is key to success.
With the ability to take in large amounts of data in any format, prove that it is timely, accurate, and complete, and quickly connect to various venues and parties, financial institutions have a powerful resource at their disposal. To capture this, it was stressed, they need to learn to be data focused and take a holistic approach to their reporting, to avoid multiple fragmented silos and solutions.
This requires some effort in the short term however, it also empowers firms to maximise the efficiency and value of their regulatory reporting processes. As one of the panellists pointed out when discussing lessons learned from regulatory reporting, this is a function which interacts right across the front, middle and back offices, giving it the potential to capture valuable learnings on what is and isn’t working well. This strategic view is what offers the potential for regulatory reporting to be more than just a cost.
View our Leveraging the Lessons of Regulatory Reporting webinar on demand and discover how the industry is preparing for 2021 reporting deadlines and challenges, including CAT, EMIR REFIT, MiFID, TRACE, and more.