The U.K. Financial Conduct of Authority and the Bank of England announced plans to develop their data and analytics capabilities to help both regulators predict, identify and respond to firm and market issues faster.
The FCA's new data strategy will see it increase its focus on the use of advanced analytics and automation techniques to further understand how markets function. The financial watchdog will invest in new technology, skills and work methods to improve its understanding and use of data and innovative technology. The transformation strategy includes establishing data science units in selected parts of the organization and making full use of potential opportunities resulting from the regulator's migration to a cloud-based IT infrastructure.
"[A] data-driven approach to regulation allows us to anticipate harms before they crystallize, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively," Christopher Woolard, executive director of strategy and competition at the FCA, said.
Meanwhile, the BoE published a discussion paper on improving the timeliness and effectiveness of data collection from financial firms, and will be accepting written responses until April 7. The central bank also plans to meet with regulated firms and solution vendors through the first half to discuss issues facing current data collection methods and identify potential solutions.
Additionally, the FCA, BoE and seven regulated firms jointly published a viability assessment report on the latest digital regulatory reporting pilot, which will potentially allow companies to automatically supply regulators with their requested data. The initiative is expected to reduce the cost of collection, improve data quality and reduce the burden of data supply on the industry. The report also covers an assessment of the technological and economic factors that may influence a shift toward automation in regulatory reporting.
The FCA and central bank have also agreed to collaborate on common data standards, launch a joint review of the legal implications of writing reporting instructions as code and carry out a joint independent review of several technical solutions in the digital regulatory reporting pilot.