Regulators are increasing their focus on the digital aspects of compliance and regulation. Can your firm measure up? 

The digitalisation of financial services and compliance shows no signs of stopping—meaning that supervision is becoming increasingly digital in response. New content from the Financial Conduct Authority highlights how they are responding at pace and within actions that parallel their EU counterparts. From leveraging data to regulating regtech, the message is clear: ‘digital’ must be a priority for regulators and regulated entities alike. Regulated firms need to ask themselves if and how they can keep up.

The FCA’s vision for the years ahead is to become a digital regulatory body whilst expanding and protecting its intelligence and data assets. As outlined in a recent speech by their Chief Data, Information and Intelligence Officer, Jessica Rusu, the FCA believes that they must “be intelligence led and prepare for the future”, making use of data science and advanced analytics in order to ensure that their decision-making is judicious when regulating at scale.

Rusu called attention to the FCA’s Data Strategy, which she said is helping the FCA to  “become more effective – harnessing data; converting it into actionable intelligence; and enhancing our [the FCA’s] understanding of what’s happening in real time, and crucially, of emerging risks.” They are also developing a Digital Unified Intelligence Environment (DUIE) “to connect the vast array of data and intelligence we hold across our systems [and] decisively spot and stop harm.”

This speech reflects objectives outlined in the recently-published FCA Strategy for 2022-25. In it, the FCA states that it is focusing on becoming “more innovative, assertive and adaptive. This includes how we are using our improved data and digital capabilities to be a more forward-looking, proactive regulator.” Part of their reason for becoming more digital is in response to rapid digital advancements in financial services such as fintech and regtech.

This move from the FCA is in keeping with a nearby neighbouring regulator, the European Banking Authority (EBA): in 2021, they published an in-depth analysis of the EU’s regtech sector. According to their analysis report, the EBA plans to:

  • “Accumulate experience and understanding that in the future will help the scaling up of innovation in digital finance, including use of Supervisory Technology (SupTech).”
  • Foster “convergence of existing supervisory practices on RegTech”
  • Share “the best practices how to use Supervisory Technology.”

RegTech was a “priority topic” for the EBA in 2020-21 and it continues to monitor developments in the field as more and more financial institutions (FIs) adopt and report benefiting from regtech solutions. Indeed, the report found that “Overall, RegTech solutions can assist FIs comply with regulatory standards, support risk management and counter financial crime.”

The message for firms is clear: modern compliance means ‘going digital’, and firms need the tools to match. The EBA itself found that FIs experienced many benefits from using regtech solutions, the main ones being:

  • “enhanced risk management”
  • “better monitoring and sampling capabilities”, and
  • “reduced human errors”

Regulatory and compliance management technology like ComplyPortal offers firms one-stop solutions to manage their compliance needs—be it ongoing monitoring, creating easily-accessible and auditable record trails, or managing and maintaining compliance in the age of hybrid working.

Find out more about how the ComplyPortal platform can help firms adapt to new regulatory expectations at: https://complyportal.uk/modules

About ComplyPortal:

First developed in 2011 by compliance professionals for compliance officers, ComplyPortal offers workflow, automation, and several modules to help firms with control and regulatory compliance monitoring.

ComplyPortal simplifies financial services regulatory compliance management on an easy-to-use cloud-based comprehensive compliance platform. It enables compliance officers, risk officers and senior management to keep track of their firm’s regulatory responsibilities and workflows. Our platform includes the following modules, among others:

  • Monitoring: a year-round schedule pre-populated with monitoring questionnaires to ease compliance processes.
  • Registers: lists controlled by the Compliance officer, but easy for staff to view.
  • Risk: map and control risk areas to effectively identify and manage risk for your firm.
  • eKYC solution: perform comprehensive searches, including client identity verification, document authenticity, and more for a comprehensive KYC and AML approach

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