You may agree that there is a constant rise in the regulatory scrutiny on banks. With regulators gaining more capabilities to analyse data using technology, they are striving to ensure compliance in a more transparent and auditable way. Unlike in the past, where banks submitted static reports at a specific time in the right format, they are now looking for more detailed and granular data for better insights. They are not satisfied with the right conclusion made by the bank and reported to them but are looking for explanations that led to the conclusions as well. This leads to the responsibility of the bank to produce detailed reports backed with data and demonstrate how the conclusions noted in the report were made through the underlying data. High accuracy & acceptable data quality and an auditable trail thus become imperative.
The need for data to meet reporting requirements are not restricted to the regulators alone. Bank’s senior management equally requires a more granular and integrated view of finance and risk data across market segments. This enables them to enhance internal risk management and their decision-making capabilities. Thus focus on data for improving regulatory reporting is equally beneficial to business and senior management.
Now the challenge, in having granular data with high accuracy that is auditable at the same time, is posed by the discrete nature of systems used by various businesses and the manual way of compiling data across these various applications. Often different businesses use a set of applications that do not talk to the applications of another business. This causes a disparity in data, and it lacks a unified data definition resulting in poor data governance. This challenge can be overcome only through integration and automation of finance, risk & compliance function across the bank.
As highlighted above, data requirement is not driven by the regulators perspective alone but businesses and senior management too. Thus the business case for better and granular data across finance & risk function could also be seen as a business strategy wherein it enables senior management to manage internal risks better and draw insights to make better strategic decisions. Thus automation of regulatory reporting need not be an isolated activity but incorporated into business as usual as a core component in a bank’s finance & risk function. It will result in centralisation and harmonisation of data from various organisational silos that are required for regulatory reporting. It will create a single source of truth, providing data for any report.
To enable such a vision of having a single source of information across the bank and its geographies breaking down silos that are often created by discrete initiatives to meet with different regulatory requirements is achieved through our product, the web application “Compliance by Design”. This application will be used across the bank, and it’s geographies by the finance, risk, compliance and front office users. It will seamlessly embed compliance into all day to day business activities. It will thus improve traceability, transparency, effectiveness and of course, the efficiency of various processes. This will result in a single source of truth for the bank.
Thus all the data needed for the regulatory reporting will be present in this single application. Report generation can be easily automated. These reports will have a high quality of data and the conclusions made can be easily traced. Any changes in these reports can be done at a rapid pace due to the inbuilt agility in the system. At the same time, workflows in this application will make the regulatory engagement process effective and much efficient.