11 Jun The Rules of TOM: Best Operating Practices for Regulatory and Risk Reporting
A financial institution’s regulatory compliance success depends on the clarity and precision execution of its operating practices for regulatory and risk reporting. Having a well-articulated target operating model (TOM) sets the stage for success. Indeed, an organization’s operating practices for regulatory reporting can only be measured against the stated goals expressed in its TOM.
“The Rules of TOM” arises from AxiomSL’s years of experience working with financial institutions globally to develop best practices around implementing and operating regulatory and risk reporting. In this paper, AxiomSL shares ideas that enable an organization to strengthen its target operating model (TOM) and operating practices for regulatory risk and reporting.
To manage its many rivers of data and meet complex regulatory requirements, financial institutions must conquer the three Vs of data challenges: velocity, volume and veracity. Regulators require information at ever-increasing frequencies, and organizations must grapple with rivers containing volumes of diverse data in order to meet regulatory requirements. Organizations must expose regulatory datasets across multiple discreet filings and be able to withstand audits. This is where veracity ― trust in the accuracy of these datasets ― becomes the crucial issue. Each data river must be accurate, fit for use and managed consistently in order to meet many regulatory reporting filings and stand up to scrutiny.
To successfully address these challenges and maximize the strength of its regulatory operating practices, financial institutions should consider adopting the following goals into their risk and regulatory reporting TOM:
- Attestation framework
- Production timeliness
- Production cycle stability
- Manual intervention minimization
- Cost optimization
As it explores each of these goals, AxiomSL leverages the best-practice process concepts of data rivers and service level expectations (SLEs). By utilizing these concepts, a financial institution can incrementally and continuously improve the quality of data flowing through the organization, establish stronger on-cycle and off-cycle production architectures and processes, better manage constant change in its regulatory and risk reporting ecosystem, and achieve the goals of its TOM.