We focus on digital capabilities required for investment firms to share information with their regulators. In short, we move from ‘what’ regulators need to ‘how’ to reconstruct the data plumbing to get high quality and timely data.
Adam Turnbull, Goldman Sachs and Dawd Haque, Deutsche Bank help describe how the sector can work collaboratively over the next decade to unpick the twisted data knot to reduce fines, unlock business value and create better outcomes.
Regulatory data quality is an enormous challenge, and one that JWG has been helping the industry with since 2006.
In June 2012, JWG published Dirty Windows: regulating a clearer view – The €24 billion case for EU transparency? This was one of the first research efforts to bring together the impact of post crisis data demands.
Our paper warned of the ‘illusion of control’ and the risk of ‘Garbage In, Gospel out’ (GIGO) inherent in the way 87 firms from 10 EU countries were tackling new demands for regulatory transparency. Despite the €33.3 billion projected spend by 2015, we foresaw just how creaky the data factories being assembled were.
Thompson Reuters’ 2021 analysis highlights the growing regulatory intolerance on both sides of the Atlantic for poor data. However, this is not the same story we knew in 2016. For the last 5 years, the industry has been quietly revolutionizing the tooling required to share information and now the regulators are beginning to adopt their thinking about how to incorporate it into their data requests (for more background see JWG Digital Regulatory Reporting analysis).
Angus shares the fundamental ‘step back’ which Bank of England has taken to renew the foundations of information sharing. He describes reforms for common data standards, modernised reporting instructions and defining an integrated reporting approach. He also shares the thinking behind this being a 10-year journey which involves a wide community of regulators, not a short-term fix only in the UK.
Dawd, Adam and Gavin describe how it has taken a decade to come to grips with the challenges to share not only data, but the context behind it and the way to derive meaning.
One of the major developments in the past decade has been the development of the ISDA Common Domain Model which is incorporated into JWG’s industry-wide Global Derivatives Digital Regulatory Reporting (DRR) programme. The group agrees that these developments allow the industry to put its shoes on and get to the starting line for the race ahead.
We conclude that the short-term focus is to get a real, practical win by 2024 so that the industry can get the credibility it needs to prove that digital tools and agile approaches can deliver real value.
At JWG, we see the industry at a tipping point this year and are helping the Derivatives sector execute with JWG’s Global Derivatives DRR programme. Stay tuned for more detail on in another RegCast on this shortly.
In the meantime, we are continuing to dig into what other regulators such as the BIS, Banca d’ Italia and APRA have been up to.
For more background and commentary on global regulatory reporting obligations for financial instituions please sign-up for access to our RegTech Intelligence Hubs here and join our thriving LinkedIn community here.
To learn more about what we have found, please register for our NextGen SupTech reporting: Insights from regulatory innovators event on 30 March.
Speakers and Guests
Head of Data Collection Transformation Team, Bank of England
PJ Di Giammarino
Global lead for Regulatory Market Initiatives, Transformation & Strategy – Deutsche Bank
Global co-head Regulatory Engineering, Goldman Sachs
Director, Financial Services Group, Grant Thornton
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