Few banking organizations can say that they are 100% confident in their regulatory reporting processes, or that they do not view compliance as a time-consuming and expensive affair. Most banks, especially small and medium-sized ones, are constantly between a rock and a hard place when it comes to dealing with compliance. On the one hand, the race to meet the evolving demands of regulators can become quite tedious.
But on the other hand, if banks fail to meet their regulatory standards, they risk accumulating heavy penalties and losing the trust of their regulators and the general public. They also have to deal with the additional consequences of being considered obsolete within their industry.
If you are one of the stewards of your bank’s compliance program, how can you improve your efforts and your standing with regulators? To that end, here are some tips you can use to streamline your current regulatory reporting process and go beyond seeing compliance as just an administrative headache.
Rethink your compliance journey as a holistic intervention for your bank
The first tip concerns your mindset regarding your compliance program. As regulatory processes become more complex and therefore more difficult to implement, it’s easy to lose sight of why you need to be on top of compliance. But you should never forget that compliance isn’t just about doing your best for your regulators or avoiding fines.
The ideal compliance journey is a holistic journey, that is, a journey that will allow your bank to improve its approaches to risk management, balance sheet management and capital gains management by based on what you see from your compliance data. Strengthening your compliance program can also save your bank a lot of money in terms of operational costs and miscellaneous charges. If you keep this notion at the heart of your efforts to evolve your regulatory reporting system, the journey to multi-standards compliance will be much easier for your bank.
Integrate a dedicated regulatory reporting solution
Second, you may want to consider new technology solutions for your compliance processes, such as dedicated regulatory reporting software. Upgrading your current technology stack for compliance can help you achieve the following goals in particular:
- Joining a single source of truth for everyone involved in the compliance journey, thereby eliminating the data silos that often hamper the compilation of timely and accurate reports.
- Better clarity and control over your data through the use of features such as instant data quality checks and data quality dashboards, which will help you ensure accuracy and integrity of your data.
- Access to automated technologies that can support the routine tasks that constitute regulatory compliance, from data aggregation to reporting.
While it is true that upgrading to a new regulatory reporting solution will require a significant initial investment, it will save your bank hundreds of hours, and therefore hundreds, if not thousands of dollars, to achieve this. to full compliance. Your compliance staff will be better coordinated with each other when doing their jobs, and they will also have more freedom to make advanced-level decisions about your reports.
Identify data overlaps for multiple regulatory frameworks
The third thing you can do is build a consolidated data strategy to meet multiple regulatory frameworks at once. It is quite possible to have an all-in-one approach to filling multiple repositories if the data requirements are similar, as in the case of Common Reporting (COREP) and Financial Reporting (FINREP). Of course, this is better than repeating the same tasks of collecting or consolidating data over and over again.
Your bank will need to identify the data elements involved in multiple standards, and then determine a way to sort and select your data, based on the regulatory standard you are reporting for. Once done, you can customize the format and content of each report accordingly.
Implement a reliable testing methodology for your compliance data
Fourth, you need to make sure that compliance controls are in place and that your compliance system is treating data the way you want it to. You can do this by finalizing a data test schema.
Testing will certainly be a difficult undertaking for you and your team, as you have a limited window given the looming deadlines for particular regulations. But if you are able to develop a reliable test framework and quickly identify test obstacles, this task will be much easier to implement.
Organize compliance training for relevant personnel
Fifth, it is a good idea to organize regular compliance training for all staff who will be involved in regulatory reporting. This is an opportunity to educate your staff about the banking laws and regulations with which your institution must comply. It also allows you to discuss the latest developments in your bank’s regulatory compliance procedures and policies.
These training sessions will allow all members of the compliance team to âsharpen their sawsâ in their knowledge, analysis and reporting acumen. Remember to keep everyone up to date with updates from regulators, such as changes in timelines, so the entire compliance team is on the same page on what you need to accomplish.
Final words: Create a great compliance program for your bank
Regulatory reporting doesn’t always have to be a thorn in the side. If the processes that govern your compliance journey are simplified and made more efficient, you can rest easy when you meet with your regulators. You will also reap the benefits of being more analytical, more data-driven, and more in control of your bank’s performance metrics.
Knowing this, take the necessary steps to streamline your regulatory reporting and transform your compliance processes into more holistic ones.