The proliferation and complexity of industry regulations has meant that reporting and compliance requirements have become much less straightforward. Manual processes are now simply inadequate and in response, RegTech solutions have entered the market to support reporting and compliance workflows in organisations.
In this second instalment of our three-part RegTech Series, we explore how RegTech tools can assist organisations with regulatory reporting and compliance. Specifically, we examine the technological features that in-house legal teams are using to integrate and enhance their reporting and compliance function.
What is regulatory reporting and compliance?
Regulatory reporting and compliance are mandatory practices in which organisations are required to collate, analyse, and submit specific data and information that regulators can use to assess the organisation’s health and level of compliance with the relevant regulatory frameworks. Although some reporting can be managed internally, most reporting is governed externally by a dedicated and independent regulatory body. That being so, all organisations are likely obligated to report to one or more regulatory bodies across varying industries to comply and demonstrate compliance with the industry-specific regulations.
The financial industry in particular has experienced increasingly sophisticated regulatory obligations which demand more traceable, accountable and auditable reporting processes. Accordingly, the Ernst & Young Global RegTech Industry Benchmark Report 2019 showed data collection and reporting to be the top function area for RegTech solutions across firms. As such, many organisations have adopted and implemented RegTech solutions that can improve how they collect data and report, in order to remain compliant and demonstrate compliance with the evolving regulatory obligations.
RegTech reporting and compliance solutions for in-house teams
RegTech reporting and compliance solutions for in-house teams require two main capabilities. These are Reporting and Dashboard tools that collect information from across the organisation and develop standardised reports for management and compliance purposes, combined with Compliance frameworks that monitor and/or reflect changes in the regulatory environment to ensure that the organisations policies and controls are up to date with the latest requirements. Accordingly, RegTech solutions for regulatory reporting may utilise Big Data and Analytics, real-time reporting, cloud computing and automation (workflows, document) to aggregate, analyse and report large volumes of data.
An example of a financial services focused reporting tool that integrates the collection, assessment and reporting of potential issues to one online platform is the Gadens Breach Manager solution for in-house legal and compliance teams. In this example, the platform can be configured for access by multiple internal and external parties which facilitates collaborative, timely and cost-effective reporting and compliance workflows. Furthermore, the software intuitively collates and organises data into a predetermined format, which enables efficient cross-functional management, compliance monitoring, analysis, documentation, reporting and review.
Some additional benefits of using RegTech for reporting and compliance include:
Increased operational efficiency
Increased auditability, reliability, and consistency of information
Improved data quality and data retention
Access to data-driven insights and continuous process improvement
Flexible and scalable process
Conclusion
In summary, RegTech presents an opportunity for in-house teams to replace manual reporting and compliance processes with in-built workflows, automation tools, visual analytics, data capture and cloud computing. As a result, the legal and compliance functions can achieve the necessary agility required to keep pace with an increasingly complex regulatory environment, whilst also improving their operational processes.
