Update: Regulatory Change and Data Management

We held our first Regulatory Update of 2021, in partnership with our Corporate Member Grant Thornton, on 25 March. 

The update focused on Regulatory Change and Data Management, including the PRA's recent Dear CEO letter that identified Financial Resilience as one of its key priorities for 2021. 

The presentation was delivered by,

Niresh Rajah, Managing Director, Data and Regulatory Change, Financial Services Group, Grant Thornton, and 

Nivedh Iyer, Data Management and Regulatory Capability Services, Grant Thornton

Niresh Rajah opened the presentation by noting that banks are now spending 50-70% of their 'change' budget (as opposed to 'business as usual' budget) on managing regulation – probably double what they were spending five years ago. 

Putting together the inter-connected themes of data, regulatory change, and the new possibilities offered by RegTech, Niresh identified four inter-dependent topics which are now 'top of mind' for senior bank executives:

• Increased regulatory pressures arising from a backlog of commitments, Brexit divergence, the increase in SMCR and other conduct regulations, and increased risks related to financial crime and to data management.
• Cost pressures and the requirement for sustainable compliance operations, which is leading to the development of increasingly efficient RgTech software.
• Data management as a tool to accelerate digitalisation of banking services (and monetise it)
• Digital assurance and assessments of a firm's digital maturity.
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Nivedh then outlined a possible approach to data management that progresses from Horizon Managment, to Regulatory Programme Assurance, RegTech Enablement, Data-led Regulatory Change and finally to the Optimisation of Regulatory Optimisation.

The full slide presentation is given below as 'Attachment'.

Among the points discussed was how to integrate RegTech and Data Management into a governance structure. Niresh suggested that a bank's Regulatory Committee could report in to the Executive Management Committee rather than the Audit and Risk departments (i.e. to the first line not the second line.

Among the interesting points to arise from the slide pack is that 69% of regulations issued by UK Regulators since January 2020 have been issued by the FCA. The PRA issued 24%, the Payments Systems Regulator 6% and the Treasury 1%. These figures have been compiled using Grant Thornton's IA-led data tools that identify regulatory issues that might affect their clients.

For more information, please contact:

Niresh Rajah: niresh.rajah@uk.gt.com 

Nivedh Iyer: nivedh.r.iyer@uk.gt.uk