Originally published by OutLaw.com

Businesses in the UK's financial services sector have been asked to help shape how technology can be used to improve the regulatory reporting process.

The Financial Conduct Authority (FCA), together with the Bank of England, has already explored the issue at one of its 'TechSprint' events with some financial services providers, technology companies and subject matter experts.

That November 2017 event established a 'proof of concept' that "could potentially make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide". Now the FCA is looking to develop that work (23-page / 376KB PDF) with the help of others in industry.

"The event developed a proof of concept that proved we could turn a set of reporting rules within both the FCA and the PRA Handbooks into a machine-readable language," the FCA said. "In other words, we could create a language that machines could understand and so remove the need for human interpretation. Machines could then use this language to automatically carry out (execute) the rules. Once the rules were translated, machines were able to fulfil the requirements by assessing the information required and then pulling this information directly from a firm's databases."

"The TechSprint also demonstrated the potential flexibility of this approach by simulating a rule change in the Handbook in real time and seeing the machine automatically changing the reporting data," it said.

The FCA said there is potential to develop the proof of concept work to allow financial services companies to carry out "machine executable reporting" across multiple regulatory reporting regimes.

The regulator said that the work it is exploring is aimed at addressing some of the problems associated with the way regulatory reporting requirements are currently met by businesses.

According to the FCA, more than 500,000 scheduled regulatory reports are submitted to it by financial services companies each year, with further "additional ad hoc reports" also filed.

The data it receives "are critical to our market integrity objective; assisting our ability to deliver effective supervision, monitor markets and detect financial crime", it said, but because the regulatory reporting requirements are interpreted and implemented manually by each business, it creates "the risk of different interpretations and inconsistent reporting".

Christopher Woolard, the FCA's executive director of strategy and competition, said: "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."

Businesses have until 20 June to respond to the FCA's call for inputs. The regulator said it would then publish a feedback statement summarising the views received and the proposed next steps before the end of this summer.

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