Regtech promises to streamline regulatory reporting and compliance in the financial space
The UK’s Financial Conduct Authority (FCA) and the Bank of England (BoE) are enhancing their data and analytics capabilities, which could result in the implementation of digital regulatory reporting.
Using technology to harness data and assist with regulatory compliance is a trend gaining traction within the financial space. According to GlobalData’s Thematic Research: Regtech in Insurance report, regulation governing financial services providers has expanded substantially since the outbreak of the global economic crisis of 2008, and keeping pace with changes has become extremely burdensome to financial institutions and insurers alike. But regulators face a similar challenge, now having to process larger volumes of data than ever to ensure there are no gaps in compliance.
Regulatory technology (regtech) promises to streamline regulatory reporting and improve efficiencies. GlobalData’s report finds that organisations within the financial space are increasingly turning to regtech solutions to improve their data management capabilities, monitor regulatory compliance, and automate reporting.
The FCA and BoE are not the only ones looking into ways of improving the timeliness and effectiveness of data gathering from financial institutions. Other authorities around the globe are also exploring avenues to digitalise the collection of raw data, including the Australian Securities and Investments Commission, the Hong Kong Monetary Authority, and the US’ Consumer Financial Protection Bureau.
Although regtech remains in its infancy, its adoption will only continue increasing as entities take measures to mitigate risks, which are increasing in line with the surplus of legislation. Furthermore, advances in technology will take regtech solutions to a higher level; blockchain technology, for instance, has the potential to introduce one shared platform between regulators and financial entities, where data can be accessed and updated in real time.