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Regulatory Reporting: What Banks can do to Keep Pace with the Changes



Banking regulators play a pivotal role in the setup, development, and safety of the banking system, thereby ensuring its continuity and profitability. To manage banking systems effectively, regulators seek timely and accurate information from member banks in specific formats at regular intervals. ‘Regulatory reporting’ is the submission of raw or summary data needed by regulators to evaluate a bank’s operations and its overall health, thereby determining the status of compliance with applicable regulatory provisions.

The Evolving Regulatory Environment

With the introduction of Basel I, II, and III, among other regulatory requirements, banks and financial Institutions are compelled to develop robust processes and systems, owing to the increased requirement of information reporting, calculations reconciliations and audits, and so on. A solution that automates and streamlines the process to generate accurate reports in a timely fashion, and is scalable and flexible to meet future demands, is therefore the need of the hour.  

Regulatory requirements differ across countries and regions. Some governments follow a proactive approach where they control the majority of the banking organizations, restrict lending and investing activities, and limit the entry of new players. On the other hand, some governments do not directly control banks, but place significant emphasis on having banking organizations disclose accurate information on a periodic basis, as a means to monitor their performance. 

Why Financial Institutions find it Challenging to Meet Ever-changing Requirements

Even as financial institutions provide a variety of services to customers across the globe, the need to report financial information to regulators of respective jurisdictions is growing by the day. This is not an easy task for banks as they need to generate not only internal reports, but also collate data for Financial Reporting (FINREP), Foreign Account Tax Compliance Act (FATCA), Common Reporting Standards (CRS), and BASEL reports, among others. Existing IT systems at most banking and financial institutions are not equipped to handle the ever-changing reporting requirements with ease. 

Coping with Evolving Regulations: Technology to the Rescue

To meet the reporting requirements of an ever-changing regulatory setup, banks and financial institutions are looking to upgrade their legacy systems, or implement tools that will help identify, collate, and convert data into required formats to generate reports. While there are a number of tools and service providers in this area, the demand increases with every new regulation.  

These regulatory reporting tools help banks avoid inherent problems like legacy system issues, lack of granular data, excessive system feed and complexity in data mapping, compatibility for data feeds, and so on. Modernizing and automating regulatory reporting processes will deliver several functional benefits to banks. 


The financial crisis and the consequent economic slowdown resulted in regulators across jurisdictions introducing additional reporting requirements as well as changes in regulatory reporting formats. New regulations pose many challenges to banks and financial institutions, and it is therefore imperative for banks to take a relook at their systems and deploy solutions that help them comply effectively with the new requirements. They can choose to adopt available solutions aimed at meeting specific needs to modernize and automate their regulatory reporting, or partner with a service provider to develop tailor-made tools that will meet their current and future reporting requirements. Whatever option they opt for, banks will have to act as quickly as possible since most new regulations have stringent timelines.