Over the past few months, I’ve spoken to service providers across the financial services industry in Jersey about how they’re dealing with the changes to significant persons reporting and confirmation statements. It’s been part of the process of developing our regulatory reporting platform that automates the approval and filing process based on data in existing business systems.
But I’ve been surprised by the approach of many.
It’s 2020. There’s no reason to be filing things manually. There’s no reason to be passing paper files around the office. And RPA isn’t a long-term strategy for automation.
So what approaches are service providers taking to meeting the new requirements?
1. Throwing people at it
Some businesses are planning to manually input data through myRegistry.
They’ll be manually consolidating data from multiple systems into spreadsheets, manually processing sign off from fee earners, then transforming that into the format required by the JFSC before submitting it via the web form.
It’s time-consuming, risky, and an unwise long-term strategy.
How will they ensure data in line of business systems matches what’s been filed with the JFSC?
How will they know they’ve missed filing an update?
And it seems crazy to me that they’d want to go through another round of manual validation to file confirmation statements in 2022.
2. Hoping existing software vendors deliver a solution
Most service providers have some form of existing software for managing client structures. Many have more than one tool – either as a result of client demands or historic M&A activity.
Lots of the businesses I’ve spoken to are holding out on making a decision about what to do, in the hope that promises of an add-on for their existing software delivers what they need.
There’s an assumption that this will be the cheapest, simplest approach.
But what if the vendor doesn’t deliver? If a client has multiple source systems how will they ensure data is consistent? How will they manage resources and compliance across the whole business?
And what’s the plan if they get to December and find they’re backed into a corner with a tool that works for now, but doesn’t deliver the right long-term solution.
3. Using RPA (robotic process automation)
RPA has been a favourite go-to for much of the Jersey finance sector for a number of years, but many RPA implementations fail.
Using RPA “bots” it’s possible to automate basic business processes.
But delivering RPA that works takes significant design, planning, and ongoing governance and maintenance. The application will be a maintenance burden for each business and will require significant testing prior to go live. The JFSC also has a lot of business rules that need to be catered for – errors will occur, resources will be needed to keep the RPA going, and communication between the business and IT will take time.
Without time to integrate cognitive tech (like machine learning and natural language processing), the ability for RPA to handle edge cases is limited, and because each tool is typically only used in one business, the underlying technology isn’t being improved based on issues discovered in data sets that have been processed in the past.
While RPA can cut down on manual data entry through myRegistry, it’s not a replacement for a bi-directional sync from the API which enables businesses to guarantee accuracy of submissions, and validate data on an ongoing basis.
4. Building custom software
Some companies are building custom tools to manage the process – along with all the benefits and drawbacks that bespoke software brings.
This is a good option if time and resources are not an issue, and is by far the best option of the four we’ve discussed so far. But for companies that aren’t well into the development cycle at this point, it’s too late. And for those that have started, a question: are you totally confident you’re going to pass testing in time?
5. Using dedicated regulatory reporting tools
Dedicated regulatory reporting tools integrate with existing business systems and the JFSC API. They can enable you to compare data in line of business systems, then compare that data with what’s been filed with the JFSC.
They include the ability to assign tasks across the organization, manage the sign off process, and then push completed filings direct to the JFSC via their API.
There’s a secure audit trail. Every completed task, update, and sign off is logged.
Event-driven reporting is a key part of these fully integrated systems too. Once filings are submitted, there are automatic notifications of discrepancies between data in business systems and what’s been filed – ensuring action can be taken before the 21-day reporting deadline, and filings made with the click of a button.
Make your strategic decision
Long term, we know that we have to automate to remain competitive, and we know that fully integrated systems that are simple to use and maintain are the right long-term approach. To me, a dedicated regulatory reporting system is the only option that makes sense right now, which is why we’ve been developing our own regulatory reporting platform since 2017.
But no matter what option you choose it’s time to make your strategic decision. You need to make the call in the next couple of weeks to prevent a chaotic panic as the deadline creeps ever closer.
If you’d like to talk about how XRM’s dedicated regulatory reporting platform can help you comply with the changes to reporting without clunky add-ons, without the risk of failing to deliver on time, and while helping you stay compliant for years to come, I’d love to speak to you. Find out more here, drop me an email at firstname.lastname@example.org, or give me a call on 01534 505 010.