Regulatory Reporting in the ever-evolving Banking Sector

Fusion Practices


Jul 4, 2022

In the current era of global and transnational financial systems, a delusion in one corner can potentially upset the entire economy. This has led to increased scrutiny with stern and more complex regulatory requirements being put in place for financial institutions. Regulators, besides shortening the time, have also doubled the information sought. In a typical banking environment, you will find that regulatory reporting does not get produced from one single system. It is quite common for data to be collected from the general ledger system (Oracle Cloud GL), investment systems, market data (Example from Bloomberg), risk management systems etc. Often you need a last mile reporting system that will collect data from various different places in order to produce such regulatory reports. In case of Fusion Practices, we have experience across Oracle Narrative Reporting & FCCS within Oracle EPM Cloud for implementing last mile reporting systems for Regulatory Reporting that could be used for reporting across IFRS 17, COREP, Solvency II, SEC. The benefit of implementing Oracle EPM for last mile regulatory reporting systems also ensures that strict government and control processes are being followed for these reporting.

Therefore, for regulatory reporting the risk of finance data and technology have become strategic board level topics. Banks are now looking for strategic and sustainable solutions that can help them sail through this journey of compliance. Rapidly changing requirements mandate that banks update their system to a one that meets all of their needs. 

Reporting requirements in the Banking sector

Reporting requirements in the Banking sector are continuously evolving and creating unprecedented demands on the technical and functional infrastructure of all organizations. This has demanded a paradigm shift in envisaging and creating solutions and underlying enabling technology for the Banking sector. 

Regulators are demanding more granular data on a continuous basis, driving calculations from massive amounts of structured and unstructured data with its inbuilt controls, accuracy and validation challenges on an incessant basis. 

The need for data reporting

Generally, a financial institution is expected to spend most of its time on analytics review than on data preparation. But, in the real sense, they spend more time on data collection and treatment than on its analytics. This is because regulatory reporting is considered as a subsidiary function covering mainly the task of Data enrichment, and reporting handled manually. Often, the absence of an enterprise-wide strategy, or a budget for reporting systems, the development makes the entire process complex and challenging. Besides the other hurdles in the organizational structure and resource availability, some key technical issues in establishing a reliable regularity system are as follows: 

  • Banks are required to be Reporting in multiple geographies, which adds to the complexity of regularity demands. As they are expected to be compliant with the regularity standard set by different regulators across the jurisdiction.  
  • Standardization of data: Data needs to be standardized in terms of Granularity, quality, consistency and completeness. These need to go through various validations and Processes. Otherwise, Then the data and its quality will hamper for timely compliance and reporting errors.  
  • Impaired technology: We need to develop an integral system of platform and advanced technology for achieving seamless processing, which will ease the reporting requirements by overcoming heavy dependence on manual methodologies. 

Designing an efficient remediation approach

To design a proper remediation approach and to initiate the data transformation journey, banks need to identify and completely understand the current position and court challenges. Typically, banks may follow either of the two following approaches. First, a focused slash fragmented approach that can help manage compliance expectation. Two, to add up enterprise-wide transformation strategy which would mean re architecting data of all use cases. It is protective of the approach it is required to develop a truly global and effectiveness and capable reporting architecture provided by a single of the truth. Further, they need to have an automatic dataflow which significantly reduces the turnaround. 

Evolving Regularity requirements and increased supervisory expectations have changed the way banks look at regulated reporting. It is no longer an activity performed by a confined department. Rather, it has moved to being a strategic level initiative viewed as a value-based investment. To meet the various compliance requirements while addressing the multiple challenges that exist in doing so. Banks need to establish a highly scalable, sustainable and integrated platform. With strong capabilities in data management, transformation, control and automation. We have developed components that have the capability to help banks successfully transform their reporting functions.  

Author: Shinal Jain is a Consultant with Fusion Practices

Fusion Practices can transform your finance practice by leveraging Oracle’s suite of ERP Cloud to modernize your accounting processes and automate Financial Reporting, Planning, and Expense Submission and Approval.

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