Five tips to simplify your regulatory reporting process


Few banks and financial institutions can say they have 100% confidence in their regulatory reporting processes, or that they don’t view compliance as a tedious and costly 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. For one thing, the race to meet the changing demands of regulators can get quite tedious. But on the other hand, if banks fail to meet their regulatory standards, they risk racking up steep penalties and losing the trust of their regulators and the general public.

Banks and financial institutions have a wide range of third-party reporting solutions at their disposal to meet their reporting needs, but there is still a considerable amount of manual and tactical processes, which are performed pre- and post-generation. reports. . There seems to be a herculean task to get the regulatory reports on time without possibility of errors to circumvent the possibilities of loss of reputation and credibility for the institutions.

Regulatory Reporting Challenges

1. Gaps in the preparation and adjustments of regulatory data

Analyzing the data information needs of schedules and regulatory models can be a time-consuming and difficult process. Most of these would be available in the banking relational data store, but there might be a few that might require exploration on a data lake or upstream systems. Banks are currently hiring their Business DataAnalysts to do this, but it can be an extremely painful exercise, which could be more effective with some acceleration.

2. Authentication of data captured outside of the transaction

Interpreting regulatory reporting guidelines is a highly domain-demanding and intellectually engaging task, with financial institutions spending significant time, effort and resources to ensure they are not arrested for non-compliance. compliance or that MRAs publish their regulatory submissions.

Even with advances in computer technology and applications, at most financial institutions we still have some of the data entering final reports through manual intervention due to business process limitations. Most non-automated tactical feeds are adjustment figures, which are sent to regulatory teams via spreadsheets and encompass field-level information that exists outside of captured transactional data. A multitude of third-party systems must be referenced for reconciliation. Although over the years the controls established over these processes have matured, these non-automated flows are still prevalent and extremely time consuming to process.

3. Build your audit trail of captured information

Kyzer TFRS not only sends reports to regulators; it takes control of the entire reporting process from the time a transaction is updated until the report is submitted, reviewed and accepted. It can combine data from multiple sources, format regulator-ready reports following multiple different regulations, receive and ingest responses from regulators, make simple field-by-field edits, maintain audit trails, and more. all in a few clicks. TFRS is entirely exception-based, allowing for simplified, low-risk, high-accuracy reporting. Audit trails – all audits are stored and accessible at any time throughout the reporting process and for archiving.

4. Process based on minimal manual intervention

The recommendation to take advantage of various custom data extraction methods according to bank policies, central and related systems, which can read and analyze data attributes in upstream systems and recommend the likely mapping of the item source to the target fields of the maintained data model for the respective regulatory reports.

While this process cannot be fully automated initially, algorithms over time, with feedback and validation of regulatory responses, aim to gain precision and speed up this process over time. This will significantly speed up the process of data preparation and adjustment and allow more time for the regulatory team to analyze the reports.

5. Retention of data for resubmissions if necessary

Variance analysis is an important regulatory reporting process to ensure that there are no major discrepancies in reporting from submission to submission and even if there are variations, the financial institution is aware of this and can attribute it to a known business factor. Even though the scanning process itself is not very time consuming, it should be very diligent with little or no possibility of errors.

Business users of regulatory reporting teams are required to create a management summary report both for review by the internal management team and for review by regulators. And depending on the sensitivity of the data, a public, private or hybrid cloud can be used to host the regulatory reporting infrastructure.

The goals at all times should not just be reducing compliance costs, but also ensuring that regulatory transformation is aligned with the company’s business strategy – and also making the regulatory infrastructure agile enough to respond to any additional regulatory demand, future-proof the business to the maximum extent possible.



The opinions expressed above are those of the author.



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