Challenges of Regulatory Reporting

May 27, 2024

Challenges of Regulatory Reporting

Bank Compliance teams today rely heavily on manual efforts to generate multiple regulatory reports and assess the reports for potential risks with regards to customer accounts and transactions.

These manual data massaging can have broader implications for the banks as data manipulation and reporting errors can lead to regulatory compliance defaults, penalties and reputation risks.

To further discuss, there are challenges with the information that supervisors receive from parent systems for regulatory reports, such as the ones listed below.

 

Challenge

Description

Template-Based and Aggregated

Template-based regulatory reports, ask for data aggregation and varied data sharing protocols, meaning that data sets are fixed to a use case and hence the data received cannot be easily reused for other purposes.

With continuous regulator guideline changes - reporting formats, data granularity and validations are needed.

Data inconsistency and legacy systems

Legacy systems are primary sources of data within reporting firms and these systems are not always integrated.

This often results in base data pooling for any given product or transaction – both within a bank and across different banks – as systems would describe these data fields differently.

  Infrequent backward looking

Compliance and department supervisors are liable to send the reports to regulatory entities on an infrequent basis (eg. Daily, fortnightly, monthly, quarter, etc).

The need for an up-to-date report and data view is rarely facilitated given the static nature of regulatory reports, compliance team may not have the timeliest data to make informed judgments.

Different sources of data are not integrated

Information contained in regulatory reports are often linked with other types of information that may point to emerging risks, but these sources of information are not connected.

For example, market sourced information and data fields are often the first indications of emerging risks but it is difficult for bankers to scan through the vast volumes of market and news data across dashboards / files to assess the need for taking early action and reporting the same proactively.

 

The challenge is how supervisors can form an accurate picture of account / transaction level risks, regulatory compliances and have insights into comprehensive regulatory submissions using the built-in data sets.

Kyzer Trade Finance Regulatory Suite therefore explores how compliance / supervisory teams can better identify and assess account / transaction level risks, regulatory compliances and have insights into comprehensive regulatory submissions to enable early supervisory action.

The Reporting Suite ensures handling of all reports to RBI, DRI, DGFT, FIU-India and various government bodies with secure data management and warehousing. Our unique offerings can revolutionise your trade compliance operations and risk management.

 

 

 

 

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