We had the pleasure of exhibiting and speaking at the A-Team RegTech Summit in London yesterday. Held annually, the conference brings together the community of practitioners managing regulatory change and implementing RegTech solutions. Extremely interesting conversations were had, and we’ll admit that having Tower Bridge as a backdrop to the exhibition area made it all the more enjoyable!
Our Head of Sales for Europe, Tom Morris, was invited to speak alongside representatives from Societe Generale, BNY Mellon and Synechron on the topic of ‘Best Practices for Regulatory Reporting Efficiency’. And if you couldn’t attend, please see below a recap of the some of the points addressed by the panellists.
How to prepare for SFTR?
“SFTR is a perfect example of a situation where it is good to be last” noted Tom Morris. While the securities finance industry as an asset class is brand new to reporting, it is most likely not firms’ first encounter with trade and transaction reporting obligations. Not-so-distant memories of EMIR compliance dates coupled with ongoing teething problems, particularly with regards to data quality, should be taken into consideration when deciding on an approach to SFTR. Or as Tom put it: “Learn from the scars of your colleagues”. It is widely known that EMIR and SFTR draw a lot of similarities, and while one of the panellists warned firms not to “try and fit a square peg in a round hole”, it is safe to say that lessons should be learned, and expertise shared.
The SFTR go-live date hasn’t been confirmed just yet, but the most recent predictions place it at Q2 of 2020. “It might seem like a long way away, but the scope of the challenge means it really isn’t” noted Tom. Getting stuck into the data as soon as possible should be a priority at this stage. SFTR requirements outline 153 fields to be reported, and it’s been identified that a lot of the data isn’t readily available to firms. Sourcing it and bringing it together as a single source will be one of the enduring challenges noted one of the panellists, followed by the implementation of controls early in the process to ensure a sustainable framework. Or as one panellist phrased it, it’s about “trying to get as close to the truth as possible”, in a consistent manner.
Will DLT save us all?
The answer is: potentially. In response to a question about the potential for distributed ledger technology to facilitate the efficient exchange of data between all reporting stakeholders, a panellist urged to consider these breakthrough technologies with caution. “Distributed ledger technology is not a panacea to solve all regulatory reporting problems”, he commented. Having a strong business case is essential and early stage proof of concepts have been undertaken throughout the industry showing good results. Data integrity and quality have the potential to greatly benefit from DLT, but the technology shouldn’t be investigated with the hopes of solving any immediate challenges. The topic is surely on the rise, but we would perhaps suggest not to hold one’s breath for it to magically solve all regulatory reporting problems.
Where’s the silver lining?
Prefacing an enthusiastic response on potential uses of transaction reporting data, one panellist noted that his firm wasn’t focused on “fancy analytics just yet, but on meeting the deadlines and simply submitting the data to the regulator”. But putting immediate practicalities aside for a moment, all panellists agreed on the potential for data to be put to good use. Analytics present a great opportunity, and once teething issues are overcome, and controls are efficiently running, the potential for the business to benefit from this new source of data is vast. While still in early stages, some questions currently in the air are: How can firms use this data to complement other processes? How can all this information that wasn’t previously available be used by other parts of the business? If DLT works for transaction reporting, how do I apply it to the entire lifecycle of a transaction?
We would like to thank the organisers for such a well-organised event and everyone who came by our booth to discuss our trade and transaction reporting solutions. In an era of regulatory overload resulting in ever-increasing compliance costs, we enable firms to achieve sustainable compliance, without ever compromising on the discipline required to meet regulatory requirements. Focusing on improving data quality, completeness, accuracy and transparency, all our solutions are backed by a perpetual service level agreement, making sure our clients benefit from the most up-to-date intelligence in order to achieve their compliance goals.
If you would like to find out more, please contact us on [email protected]
Until next year!