The essential guide to regulatory reporting

James Polley 15.03.2018

It is regularly in the news and firms have to pay close attention to it...but what exactly is regulatory reporting? Our specialist recruitment consultants shed some light.

What is regulatory reporting?

The recent focus on regulatory reporting in the UK was instigated by the Great Recession of 2008/2009. The mandatory submission of data by banking and financial services firms is enforced in an attempt to establish complete transparency surrounding their financial records. Such data has to be periodically submitted to the relevant regulatory body; monthly, quarterly and annually.

This data allows the Regulator to evaluate a bank’s compliance with regulatory requirements, ensure that operations are in good health and rein in any dishonesty. There are differing regulatory reports, and what is required will depend on a firm’s level of returns.

Regulatory bodies functioning in the UK

  • FCA - The Financial Conduct Authority
  • PRA - The Prudential Regulation Authority
  • FSA - The Financial Services Authority
  • EBA - European Banking Authority (with Brexit, this body will have to move out of London which could have a knock on effect for hiring)

Why it’s important to be compliant

Regulatory requirements influence the economy and wider markets as a whole; they have been put in place to ensure the consumers’ rights are protected. Not only this, but the regulations also reduce the chance that the Bank of England has to bail out numerous banks that are not playing by the rules. In a sense, regulatory reporting is a method of prevention - it flags any potential issues before the effects are felt.

From a bank’s perspective, being caught out by the Regulator can have dire consequences. You are liable for fines (admittedly, not a huge worry for banks), you will likely see reputational damage from press coverage result in loss of investors and sanctions can be put in place; suspending trading and withdrawing banking licenses altogether. Regulatory bodies have the power to enforce all of the above.

To find out about some recent cases where banks have been fined by the Regulator, have a look at the table compiled by the Financial Conduct Authority for 2017 fines.

A constantly changing landscape

Every year, new regulations are put in place. Looking forward to 2018, there will be changes that update how capital in banks is measured. This article by Deloitte highlights how capital and regulatory reporting will be impacted, and they also highlight the differences of CRR/CRD IV as they are revised to CRRII/CRD V.

We are predicting that next year, with the progression of Brexit, there will be an enormous amount of changes that the UK based banks will have to accomodate for.

Technology affecting regulatory reporting jobs

Technology could further disrupt the regulatory setup through automation. Some regulatory reporting jobs can be automated - Barclays have already implemented Artificial Intelligence to conduct aspects of their reporting. It is attractive for firms as it supposedly removes the element of human error, can save on salary costs and allows positions to be opened up where teams can gain a more extensive understanding of subject matter and allow them to become more commercially able so they can partner with businesses on regulatory matters.

This disruption could well prove to be positive for regulatory reporting; we may see Robotics eventually tidying up processes. With automation carrying out the legwork, the necessary increased analytical input will help individuals understand the full scope and drive them to be more proactive in their role, as opposed to the current reactive nature of regulatory reporting roles.

More detail around regulatory reporting

We have written several informational regulatory reporting posts for you to read. The other topics we have covered include:

If you would like to speak directly to a member of our team for more information or about any regulatory reporting jobs, do not hesitate to get in touch.

James Polley - DD: 0207 092 0004  | jpolley@morganmckinley.com

James Polley's picture
Senior Consultant | Accounting and Finance Recruitment
jpolley@morganmckinley.co.uk