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Despite the many different systems in place to electronically send adviser data to the FSA, technology will never completely render the need for thematic work and supervisory visits obsolete. The FSA requires advisers to report certain types of data to them electronically, which gives them an indication of the firms' performance.

A few significant examples of this are the retail mediation activities return, the complaints return and product sales data.

By gathering data such as balance sheets and profit and loss and capital adequacy statements, the RMAR demonstrates the firm has adequate financial resources and meets the FSA's specific financial requirements.

In addition to this, the FSA also requires firms to fill in a complaints return twice a year, which includes information on the volume of complaints and speed of handling of complaints and also the number of complaints upheld and the amount of redress paid. This again is submitted electronically.

A more recent addition to this electronic data is product sales data. These details are expected to be submitted on a quarterly basis.

Although the FSA does except certain data in electronic format, they still rely heavily on being out and about on the road.

The watchdog has day-to-day supervisory relationships with firms to assess their adherence to requirements. This includes thematic work and supervisory visits and it is the data returned to them that feeds directly into this work.

Jon Finley, strategic business development manager for First and The Exchange, said no single system will be ever be accepted by the FSA as complete evidence of appropriate business practice.

He said: "Whereas the RMRA for example sets out the FSA's requirements for understanding business, which has been written by the intermediary and also helps them understand where they are as regards to capital adequacy it is not necessarily about understanding their business processes and ensuring their compliance.

"No single type of software will make the FSA turn around and say that if you use this, it means you are compliant. Therefore all we can really do as a company is work with the FSA to understand where they are going with regards to their principals and regulations and make sure that what we are trying to achieve is helping intermediaries meet those principles."

However, First and The Exchange has developed software that makes life easier for these compliance teams.

Mr Finley said: "From a compliance point of view, our solutions are designed to deliver a central electronic audit trail and a central data depository.

"Compliance teams have to spend a lot of time on the road monitoring members of their firms and networks and what we have tried to do is put all the information that they need on a central database."

Even if there was FSA accepted software, this would not stop compliance teams having to make visits to firms, as there is no way for networks to enforce their members to all use the same trusted system.

He said: "As much as we can deliver software, most networks cannot mandate anything to their members. They are an independent firms after all, therefore they will decide what sort of technology they use."

Simon Farrant, director of financial planning of Distribution Technology, said the FSA is able to establish a lot through a firm's point of sale system.

He said: "Ultimately whenever an adviser is using an automated point of sale system, the system should be able to drive off management insulation metrics to show people are being treated fairly and that regulations are also being complied with."

The FSA is willing to accept online evidence of how advisers operate and indeed does use electronic data on a regular basis.

It is just there are certain elements, such as everyday business practices, that cannot be completely assessed through a computer and have to be supervised in person.