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May 17, 2019

How Automating Regulatory Reporting Can Increase Human Accountability

There is a movement underway to automate more regulatory reporting and, at the same time, increase human accountability in this area. Are these two aims contradictory or can automation actually enable greater visibility and accountability?

The FCA recently expressed a commitment to regulatory reporting change, stating that they are planning to explore new ways of making the reporting process more effective and efficient. Christopher Woolard, Executive Director of Strategy and Competition at the FCA, explained that the current manual rulebook ‘could be misunderstood by firms’. He talked about the challenges that the huge amount of data involved in reporting creates, saying 'There is a huge amount of information for both the regulator and regulated to process.' His conclusion was that there needs to be a technology-enabled way of doing regulatory reporting.

The FCA has also previously expressed a desire to move towards a more accountability-based way of resilience reporting, with a greater focus on people and their accountability in change and resilience. This emphasizes the decisions that people make, holding them accountable and focusing on ensuring minimal negative impacts on the customer.

Woolard went on to explain that they wanted to ‘explore how technology can “reduce the compliance burden” in the industry.’ This burden is significant as over 50% of banks’ IT spending is on compliance. Woolard envisioned a system that allowed for ‘automated, straight-through-processing of regulatory returns.’ And of course, with increased human accountability.

Cutover can help. Cutover provides both automation and a higher level of human accountability for regulatory reporting activities. For example, when Clarity Management Group used Cutover to help their client with their year-end CCAR reporting in the US, they were able to meet their CCAR requirements for the first time in four years, due to a combination of better visibility, communication, and an automatic system of record and accountability.

The FCA should take a similar approach to both increasing automation and increasing accountability, with a system that links the attestation of data to the individuals who are accountable for it. Automation would not only make reporting faster and more efficient but also more effective when it comes to identifying the root cause of problems and fixing them. Rather than replacing people, automation will enable them to be more efficient when reporting to regulators.

Chloe Lovatt
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