IT RISK Whitepaper

Challenging Regulatory Requirements and Supervisory Expectations

Regulatory reporting is a moving target as a result of evolving regulatory reporting requirements. Secondly, “garbage in, garbage out” remains a pervasive problem, as the industry grapples with significant data quality challenges. Finally, as with any complex system, regulatory reporting requires (preventive) maintenance.

These challenges, relating to the evolving regulatory requirements, are compounded by the institutions’ own changes.

Given the changing nature of regulatory reporting, data lineage ensures that the organisation can understand the impact of changes.

Addressing These Challenges in an Effective, Sustainable and Cost Efficient Way

There has been an improvement in the range of positive initiatives that have been adopted whereby Boards and their Committees promote an enabling environment for financial institutions to enhance the effectiveness of the governance, controls, and other processes regarding regulatory returns.

Ensuring that procedural documentation (e.g., data input, process description, approved calculation methodologies) and a formal data attestation process between business lines and the regulatory reporting function are in place, including obtaining evidence of independent review evidencing compliance with the procedural documentation.

How Can Avantage Reply Assist?

The supervisory expectations outlined in this Whitepaper are daunting and banks are encouraged to plan well in advance for any potential review. Supervisors will assess all aspects of IT risk. Preliminary views will be formed based on information the supervisor will have already collected through their ongoing supervisory activities, the banks’ regular data submissions as well as specific questions addressing each of the dimensions.

Understanding the regulatory reporting requirements

Avantage Reply supported a leading supervisor with the implementation of quality assurance processes within the division responsible for monitoring the quality of supervisory reporting as well as supporting software vendors in developing specific reporting modules (e.g., market risk). Importance has also been placed on assisting the Eurozone- and UK-based institutions in successfully remediating issues raised by the ECB, Eurozone national supervisors and the UK PRA.

Technology capabilities

A proven track record in developing and implementing robust, flexible, and cost-efficient regulatory reporting systems: Our credentials range from ‘building’ systems (typically within large institutions), integrating vendor products in a meaningful way.

Data capabilities

These include data governance, data architecture, data sourcing and feeding, data quality verification and attestation.

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    Avantage Reply

    Avantage Reply is a pan-European Financials Services management consultancy delivering change initiatives in the areas of Risk, Compliance, Finance and Operations. Avantage Reply has operations in Amsterdam, Brussels, Frankfurt, Lisbon, London, Luxembourg, Milan, Munich, Paris, Rome and Turin. Avantage Reply adapts to the particular needs of its clients. Our consultants advise and deliver pragmatic solutions, supported by comprehensively tested analytical techniques using proprietary solutions, methodologies and prototypes. Being part of the Reply Group, Avantage Reply can, when relevant, leverage on the group’s technology competences deliver the change initiatives. More details at