In its September 2021 "Dear CEO" letter, the Prudential Regulatory Authority (PRA) issued a compelling call for increased investment, expertise, and focus on improving the reliability of regulatory reports submitted by the UK's regulated banks and building societies. The PRA underscored the need for the same level of care and due diligence applied to regulatory reports as given to financial statements. Despite these directives, some institutions still grapple with the shift towards automation, posing potential risks to the financial services sector's confidence.
The PRA's thematic findings pinpointed fragmented approaches, ad-hoc processes, and overreliance on spreadsheets in key areas like modeling, reconciliation, and reporting. Addressing these challenges requires a strategic shift towards enterprise-strength management, control, and transparency.
To meet the PRA's expectations, institutions can take a practical approach by wrapping existing processes and systems in a technology environment that maintains flexibility while enhancing change control, transparency, and auditability. Recognizing the widespread use of Excel spreadsheets in bridging process gaps, a crucial step is to integrate a standard centralised regulatory reporting solution which has the latest tech features and is easy to integrate in your environment. This approach ensures effective management, change control, document management, and reporting capabilities.
For instance, Teilen Solutions recently undertook a transformative project for a corporate bank. The task involved the seamless migration of the derivative portfolio in the banking book. Leveraging our expertise, we implemented a full automated data upload from Murex to the new standardized regulatory reporting solution designed for Counterparty Credit Risk (CCR) calculation and COREP reporting. Additionally, we played a pivotal role in updating business processes, increasing operational efficiency, and creating a new Target Operating Model (TOM). Our team meticulously validated risk calculations, ensuring accuracy and compliance throughout the transition.
A comprehensive discovery process follows, identifying critical spreadsheets in the regulatory reporting workflow. The fragmented nature of regulatory reporting demands a thorough assessment, with the most significant spreadsheets replaced in the centralised regulatory reporting solution. Proactive monitoring of these key reporting spreadsheets becomes paramount, detecting missing data, errors, or linkages. Reporting capabilities facilitate controlled communication of changes and issues, with escalation options to an Enterprise Governance, Risk, and Compliance (GRC) platform for effective risk management.
By embracing these practical steps, financial institutions can not only meet the PRA's expectations but also pave the way for a more streamlined, transparent, and automated regulatory reporting process, ensuring confidence in the broader financial services sector.
Teilen Solutions brings unparalleled value to financial institutions navigating the complex landscape of regulatory reporting. With a proven track record showcased in the successful project mentioned above, we specialise in seamlessly integrating advanced technology solutions, such as centralised regulatory reporting systems, to enhance transparency, control, and efficiency. Our expertise extends beyond mere technological implementation; we actively engage in updating and optimising business processes, fostering a targeted operating model that aligns with industry standards. By validating risk calculations and ensuring compliance, we safeguard our clients against potential pitfalls. Teilen Solutions holistic approach not only meets regulatory expectations but elevates confidence within the financial services sector, ensuring a streamlined and automated regulatory reporting process that stands as a testament to our commitment to excellence.