The Financial Conduct Authority has reiterated its commitment to changing the process of regulatory reporting, admitting its current manual rulebook could be misunderstood by firms.
Speaking at the Deloitte conduct risk roadshow 2019 in London today (May 8), Christopher Woolard, executive director of strategy and competition at the FCA, said the regulator wanted to explore how technology can "reduce the compliance burden" in the industry.
All regulated firms submit data to the FCA based on their financial activities, which is then used in the FCA's supervision work to monitor markets and detect financial crime.
The FCA currently receives 500,000 scheduled regulatory reports from companies each year, not including, Mr Woolard said, those submitted on an "ad-hoc" basis.
He added: "That’s a huge amount of information for both the regulator and regulated to process.
"Our current, manual rulebook also leaves the job of understanding our rules open to ambiguity, as firms and professional services manually interpret regulations, creating a room for inconsistency."
In 2017 the FCA launched its digital regulatory reporting project, aiming to digitise the process.
The regulator sees a potential for "automated, straight-through-processing of regulatory returns", increasing the accuracy of data submissions and reducing compliance costs.
The FCA has also hailed it as an opportunity to implement changes to regulatory requirements more quickly.
In February 2018 the regulator published a call for input on the concept and completed its first pilot phase of the project between June and December last year.
It is currently in its second pilot phase of the project, which began in February this year, with participants including Lloyds Banking Group, HSBC and Santander.
Mr Woolard said the regulator's commitment to innovation was being made for the "long term", with the FCA also pushing a recruitment drive among scientific and mathematically inclined graduates.
He said: "To make sure we have the skills to take on the challenges of the future, we’re strengthening our focus on science, technology, engineering and maths graduates to increase our capability in areas like cyber security, data science and technology.
"Having this capability in-house will become increasingly important as we grapple with the huge ethical and social questions these new technologies bring up."
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