Regulatory reporting solutions

Regulatory projects typically include the following key elements: 

• Inclusion criteria. They determine when a bank should report a transaction under legal requirements. 
• Reporting criteria. They pinpoint who is responsible for reporting a transaction. Clear reporting criteria help avoid over-reporting. 
• Weightage-based reporting rules. These rules prevent over-reporting by assigning the reporting responsibility to the party with the higher weightage. 
• Unique transaction reporting. Every transaction has to be reported using its unique reference or identifier. 
• Reporting frequency. Regulatory reports can be submitted in real time or at the end of the day, depending on the legal requirements. 
• Reporting quality. It’s determined by receiving acknowledgments or negative acknowledgments from regulators; this functionality needs to be tested beforehand and fine-tuned after deployment. 
• User interface. It has to be simple and intuitive for end users, giving them enough information on transactions reported, regulators’ responses, and reasons behind failures if they occur. 

We advise banks to follow the 3Ds model when moving regulatory projects to the cloud: 

• Define the business case. Pinpoint the tangible objectives and benefits for your organization to secure stakeholder buy-in. 
• Data can make or break the migration. Not all data can be migrated to the cloud, depending on the regime, legal requirements, and data type. Data governance will vary based on the kind of data and regulatory requirements. Finally, data must be cleaned up and organized before migration to ensure quality. 
• Design well. It’s best to avoid taking shortcuts or opting for the fastest solution instead of the best one. Instead, we advise planning the solution well, configuring and customizing it as necessary, and testing it thoroughly.

In our experience, these four critical components of regulatory project delivery often go overlooked —  even though they shouldn’t be: 

• Reducing technical debt. The desire for quick wins shouldn’t come at the cost of cumbersome, hard-to-maintain, and non-reusable software modules. 
• Leveraging new technology. Considering the potential of new technology can help organizations introduce solutions that cut time to market, boost financial performance, and enable reusability. 
• Securing a stakeholder buy-in. Stakeholders should be engaged in the project early on, during project planning and approach selection. 
• Looking at the big picture. A regulatory reporting project may offer opportunities to consolidate workflows and unify design, and taking advantage of them can substantially increase the ROI.