26 May Advancing Regulatory Data Collection Systems – A Pull Vs Push Story With RegTech and SupTech Invigoration
Ken Lamar, Founder and Principal Partner, Lamar Associates LLC
With contributor: Robert Lee, Executive Director, North America Client Engagement, AxiomSL
It’s All About Data
To keep in step with the growing demand for timely and more granular data, regulators are embarking on a journey to design the next generation of regulatory data collection systems. A critical aspect of the design process is the need for new data capabilities to effectively conduct supervisory activities to ensure the financial stability, safety, and soundness of individual institutions, and monitor the conditions of the financial markets.
The development of new regulatory data collection systems will likely have significant repercussions for financial institutions, as well as require them to overhaul their data infrastructures and change their controls, and data governance processes.
Path Remains Unclear: Key Decisions Loom
On the conceptual level, work on advancing the next generation of regulatory data collection systems is focused on several areas:
- Data standardization
- Communicating reporting requirements
- Report templates
- Granular data
- Transmitting data
As this journey evolves, stakeholders are grappling with the decision on whether the data architecture for the regulatory data collection systems should continue to be based on a “push” model in which reporting entities gather data from their internal systems and submit it to the authorities or, alternatively, begin to migrate to a new “pull” model by which regulators would be able to retrieve the required data directly from the reporting entity’s system.
However, the trend towards requesting more and more regulatory data on demand, almost in real time, leaves financial institutions little lead time to meet such requirements and creates the need for data collections to be implemented using a pull approach.
RegTech And SupTech Firms Called Into Play
With significant changes in the works, close public and private sector collaboration will be needed. In this globally trending effort to advance regulatory data collection systems, SupTech vendors and RegTech firms (like AxiomSL) will be instrumental in establishing efficient data collection mechanisms on the regulatory side and ensuring reporting financial institutions are fully equipped to accommodate the new methods in a transparent and highly secure controlled environment.