The global regulatory landscape is increasingly demanding comprehensive record keeping strategies from firms. This focus is escalating as both regulators and firms are investing in technology to remodel their data strategies and manage an expanding spectrum of content. The critical challenge lies in ensuring that content can be captured, preserved, and retrieved in its original form, considering the growing requirements around retrieval and surveillance.
In 2018, the Financial Stability Institute (a division of the Bank for International Settlements) coined the term ‘Suptech’ to denote the innovative use of technology by supervisory agencies to bolster their supervisory processes. The ultimate aim is to digitise reporting and regulatory processes, thereby augmenting the efficiency and proactive monitoring of risk and compliance at financial institutions.
The Bank for International Settlements (BIS) Innovation Hub has also identified a growing interest in RegTech, a technology that enables financial institutions to meet regulatory and compliance requirements more efficiently and effectively. These emerging Suptech and RegTech solutions cover a broad array of regulatory areas including fraud detection, KYC procedures, regulatory change tracking, countering the financing of terrorism (CFT), prudential risk management, and, importantly, auditable recordkeeping.
The 2022 State of Suptech Report confirmed the growing trend of financial authorities engaging in Suptech initiatives. More recently, in June 2023, the European Securities and Markets Authority outlined its Data Strategy 2023-2028 to explore the opportunities and challenges posed by the rapid expansion of technologies suitable for supervision, reporting, data collection, and use in response to rapid digital developments.
Hammond said it is clear that Suptech solutions can benefit both firms and their regulators by automating regulatory compliance, reducing costs, and ensuring consistency in regulatory reporting. However, this can only occur if firms have the capability to retain, preserve, and retrieve records in a complete, accurate and native context.
In April 2023, Jessica Rusu, chief data, information and intelligence officer at the UK Financial Conduct Authority, discussed the ‘Big Data Challenge’ and the strategy to transform the FCA into a data-driven regulator. Among the notable challenges, the FCA has reported a 200% increase in data volume processed for investigations, including encrypted channels such as WhatsApp.
A month later, Rebecca Jackson, director of authorisations, RegTech, and international supervision at the UK Prudential Regulation Authority, highlighted a significant change in the PRA’s use of supervisory and firm data. This shift was informed not only by the PRA’s statutory objectives and post-Brexit freedoms but also by technological and market developments.
This transformation means that, moving forward, firms will need to invest proactively in robust recordkeeping solutions that ensure complete native context record capture, retention, and retrieval to meet regulatory requirements.
One company offering a solution is Theta Lake. With its award-winning product suite, Theta Lake provides patented compliance and security for modern communications using over 100 frictionless partner integrations.
Its platform captures and archives communications in compliance with record-keeping requirements and acts as an archive connector to existing archives and data storage. Theta Lake’s AI-assisted review workflow identifies risks and provides an efficient and effective review process for compliance teams.
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