Top 5 Critical Considerations for Developing Regulatory Operations Model

RegTech Experts Share Key Insights at a Recent Broadridge Event for Asset Managers

Broadridge Financial Solutions, Inc. (NYSE:BR) recently hosted a RegTech event focused on helping firms navigate the evolving and complex regulatory landscape. The panel featured Buy-side expertise around Regulatory Reporting, Data Governance, and the Lifecycle of Investment Operations. Key learnings discussed as firms begin to develop a RegTech Operations model include: leveraging clean data, understanding the enterprise data topography, and acceptance as the ultimate ‘sign off’ for Regulatory responsibilities.

“RegTech has become the new norm and the tidal wave shows no signs of receding, placing tremendous pressure and scrutiny on financial service firms to deliver an ever increasing footprint of disclosures in tighter timeframes,” said panelist Carol Penhale, MD Professional Services, Broadridge Financial Services.  “Budgets and resource allocation to non-regulatory projects continues to diminish to feed regulatory adherence.  For many asset managers, they need to dovetail regulatory adherence with business improvements in order to not fall behind on systems and data improvements to remain competitive in addition to remaining complaint.”

The Top 5 insights shared during the event:

1. RegTech solutions as a “silo buster” – Agile, responsive technology complimented by end-to-end business flows enable silos to connect (with potentially additional unintended positive consequences) and view/use some data across a unified platform. A great starting point for firms to understand their data topography at an operational work flow view.
2. Man vs machine – Throwing additional headcount at regulatory challenges no longer works as a long-term solution. While that might work as a tactical solution, the operational work flow risk it introduces is unpalatable for most firms. Technological solutions across operations help mitigate risk and provide more consumable, actionable insights.
3. Data as a Product – Some are purporting data is now a more valuable commodity than oil.  While not everyone will agree with the statement, financial services must recognize the growing importance of good, granular, accessible data plays. Proactive data management is not only the center to better servicing regulatory adherence, but also the foundation of better operations and client servicing.  Data is the predominant output of the Financial Services industry and asset managers should treat it with the respect it deserves, not a byproduct of their business.
4. The Liabilities of Bad Data – The consequences of bad data are magnified as data moves across siloed operations. Many resources spend more time verifying data than analyzing it.  While this is acknowledged by many, quantifying the effort spent rectifying bad data is elusive.  Effort to increase a comfort level in quality of widely used sets data is a good investment.
5. Outsourcing does not Offset Responsibility – Firms are accountable for sign-off and accuracy even if they outsource regulatory and compliance functions. Understanding the mechanics of how the regulatory process is structured and the validity of the data behind the reporting is important regardless of whether the infrastructure to support regulatory adherence is internal or outsourced.
   

”Firms can take advantage of regulatory compliance deadlines to elevate their Enterprise Data Management capabilities,” said Scott Knous, Data Management Practice Leader of Olmstead Associates.  “As part of their RegTech journey, and with minimal incremental effort, firms are able to streamline their overall data architecture, enhancing the quality of data, while establishing solid governance policies. By approaching RegTech in the context of an overall data strategy, firms are ultimately avoiding additional technical debt and enabling greater operational agility”, added Knous.

 

About Broadridge
Broadridge Financial Solutions, Inc. (NYSE: BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and corporate issuers globally. Broadridge’s investor communications, securities processing and managed services solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge’s infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America, and processes on average $5 trillion in equity and fixed income trades per day. Broadridge employs more than 9,000 full-time associates in 14 countries. For more information about Broadridge, please visit www.broadridge.com.