FCA, BoE gear up for TechSprint to explore advantages of RegTech
The UK regulators are exploring how to use technology to link regulation, compliance procedures, firms’ policies and standards together with firms’ transactional applications and databases.
The UK Financial Conduct Authority (FCA) and the Bank of England (BoE) are getting ready for a two-week TechSprint to explore the potential for model-driven machine readable regulation. The UK regulators are exploring how they can use technology to link regulation, compliance procedures, firms’ policies and standards together with firms’ transactional applications and databases.
If successful, this opens up the possibility of a model driven and machine readable regulatory environment that could transform how the financial services industry understands, interprets and then reports regulatory information. Firms would be able to map their regulatory requirements directly to the data that they hold, creating the potential for automated, straight-through-processing of regulatory returns. The accuracy of data submissions is set to be improved and costs reduced, changes to regulatory requirements could be implemented more quickly.
Back in November 2016, the FCA held an Unlocking Regulatory Reporting TechSprint. The event examined the challenges that financial institutions face when implementing their regulatory and compliance obligations. Building on two of the prototypes developed at that event, on November 20, 2017, the FCA and the BoE will be organizing a two-week TechSprint to explore the potential for model-driven machine readable regulation.The list of participants at the TechSprint will include stakeholders who attended last year’s Unlocking Regulatory Reporting TechSprint, as well as those who have presented ideas to the regulators throughout the year.
In July this year, Nick Cook, Head of Data and Information Operations at the FCA, said the regulator was examining feedback from regtech firms in order to inform itself about the adoption of automated, digitized compliance.
He said the FCA was looking at the possibility of making its Handbook machine-readable and then fully machine-executable. This means that machines can interpret and implement the rules directly. The range of applications currently examined by the FCA include enhanced use of speech-to-text analytics tools within the FCA, as well as solutions that allow better use of social media analytics. The regulator would also utilize AI to detect financial irregularities, Mr Cook said.