The financial watchdog is seeking industry views on a proof of concept which could facilitate automated regulatory returns.
The proof of concept tool could make regulatory reporting requirements machine-readable and executable, and was developed by the FCA in partnership with the Bank of England and tech startups.
This means that firms could map the reporting requirements directly to the data they hold, which could in turn facilitate automated processing of regulatory returns.
All regulated firms submit data to the FCA based on their financial activities, and the data generated are essential to the FCA’s supervisory and monitoring activities.
Each year, the FCA receives over 500,000 scheduled regulatory reports, as well as additional ad hoc reports.
The FCA said regulation tech such as this could lower barriers to entry and promote competition by reducing compliance costs and regulatory burdens, improving accuracy of data submissions, and speeding up implementation of changes to regulation.
The latest proof of concept joins the larger FCA ‘Innovate’ sandbox, which offers innovators a safe place to build consumer safeguards into products and test them on a live audience.
In December last year, Mortgage Solutions reported on a regulation tech tool being developed by Barclays in the FCA sandbox which would track regulation updates from the FCA handbook and align internal policy implementation accordingly.
The power of tech
The call for input outlines how the proof of concept was developed, and asks how the FCA can improve this process.
The FCA is also seeking feedback on some of the “broader issues surrounding the role technology can play in regulatory reporting”.
Christopher Woolard, FCA’s executive director of strategy and competition commented: “Technology is a powerful shaper of financial regulation, able to make compliance simpler and more efficient.”
“Our TechSprints bring people from across the financial services world together to share their collective knowledge to solve common problems. We look forward to working with industry participants in the coming months to drive these ideas forward.”
The call for input will close on 20 June 2018, a feedback statement summarising the views received and proposed next steps will be published in Summer this year.