In today’s regulatory landscape, the stakes have never been higher as reporting obligations continue to expand. Regulators have increased their expectations and enhanced their focus on cross-regulation data consistency in their data validation and examination processes, much to the apprehension of many institutions struggling with the accuracy and completeness of their individual data.

We recently partnered with A-Team Group to bring together thought leaders from across the financial services industry for an insightful discussion on the overlaps of data elements within and across reporting regions, the challenges of achieving data consistency and solutions for successful compliance with global regulation.

Participating in the discussion were Peter Gargone, Founder and CEO of n-Tier, Brett Utnick, Director — Head of U.S. Regulatory Services at BMO Financial Group and Steve Green, Executive Director and Head of EMEA Data Office at SMBC Corporation, who shared their insights on cross-regulation data management and provided possible solutions for getting it right. Sarah Underwood of A-Team Group served as the moderator.

To begin the conversation, the panelists discussed the ways nuanced overlaps between local and global regulatory reporting regimes cause financial institutions difficulties when attempting to accurately report their data. On the whole, said Gargone, “Regulators have gotten better at cross-checking processes and have upped their surveillance tools.” Across borders, regulations differ, run on different timelines, and are prone to constant change. Utnick touched upon how the flurry of new SEC proposals coming down the pike in the US amidst leadership changes could heighten requirements for financial firms in the US. Green unpacked how the FCA and the Bank of England often move faster than other regulators when it comes to how they collect data. Although the UK is working on increasing alignment with US regulators, there are still dozens of significant jurisdictions to manage. Therefore, flexible solutions are needed to deal with differences as well as changes across regions.

Next, panelists further discussed the challenges of cross-regulatory data reporting as regulators continue to crack down. “As regulatory requirements expand, data sets are picked up and combined by disparate systems and operational processes. Data may mean different things under different regulations – it’s a large-scale data aggregation and combination process that is hard to nail down,” said Gargone. In a poll of webinar attendees, respondents cited a variety of challenges of data management across the multiple regulatory regimes at their organizations, including huge data volumes (75%), poor data consistency & accuracy (67%), and constant changes to regulations (58%), amongst other factors.

So, what concrete steps can financial institutions take to manage these overlaps productively and in the best interest of regulators requesting field-by-field assessments? How can firms produce high-quality data reporting, consistently and accurately, when it may seem like an overwhelming and complex process? Our industry-expert panelists suggested a structured, holistic approach. “Build a toolkit that is more appropriate to a broader challenge rather than a siloed approach,” Gargone suggested. Firms should work to establish a “data strategy that is well thought-out and all-encompassing, that the whole firm is bought into,” added Utnick.

The panelists agreed that businesses should know their data before creating a solution – start by picking major areas of reporting concern, ensuring core regulations are covered, and expand from there. In addition to ensuring the plan in place is enterprise-wide, it is imperative to involve the right people in these conversations to build a holistic view of the challenges each firm faces. Firms must assemble the right blend of in-house talent, technology, vendors and partners (such as the regulatory reporting services provided by n-Tier) to help them check every box and meet the current and growing needs of the firm.  

The panelists also encouraged communicating the deeper value with your organization – getting the messaging right and educating the business on risk is crucial to ensure management support and funding. The firm should see the business case, and how this process matters to the organization on a day-to-day basis. “Financial institutions should look at how we can get the value from this reporting, so the scale of the investments can match the needs of the regulators. Set it against the business value as opposed to just a compliance tick box,” said Green. “Everything needed to get compliance right helps for increased automation and digitization across the entire business.”

Be prepared to prioritize, as well: “Identify the first bits you need to get right, whether that’s from your own observations or something a regulator is chasing down. If you focus on one high-value, beneficial area to improve upon, you can satisfy regulators, as they know that you have systems in place and plans to expand and improve further,” added Green.

Businesses should aim to get their data quality in top shape at the very start, to then be able to review, refresh it and add controls around it. Utnick suggested having the correct regtech solutions and tools in place to catch any inconsistencies so that firms can get to the root cause of what’s negatively affecting their data quality. “No one’s data and tools are perfect, but you need the right rigor for governance,” he stated. “Have a rules engine that does checks for you. Have a tool that can reconcile for you. Have a system that tells you when something is illogical or inconsistent.” From there, the institution should work to remedy any exceptions at their sources, which will improve the overall quality of your data.

The business benefits of achieving cross-data regulation and consistency at your organization are plentiful, but a poll amongst webinar attendees showed that the top advantage for firms was improved compliance and avoidance of penalties. Gargone agreed with these results, stating “The true ROI isn’t [purely] operational; it’s the reduction of compliance spend and the risk of incurring penalties.” By implementing a well-thought-out data management system, fewer resources are required to uphold certain standards and there can be a significant reduction in the risk of facing fines, saving financial firms both time and money. Utnick echoed this sentiment, stating “It’s less expensive to do it right, with fewer resources required. There’s less risk overall.”

At the core of n-Tier’s business is large-scale, high-volume data-checking engines adaptable to different regulations. We specialize in helping institutions manage the accuracy and completeness of their critical business data associated with regulatory reporting requirements. If you are interested in discussing our validation and reporting capabilities, and how we can help your firm stay in line with compliance, please reach out to Jeff Bergson:

Thank you to Sarah Underwood and A-Team Group for facilitating an engaging and useful discussion on the challenges and benefits of cross-regulation data consistency and accuracy, and thank you to the other panelists for contributing their thoughts and insights on the topic. If you missed the webinar, you can access the recording here.