Regulatory Reporting Health Check

The importance of regulatory reporting in the financial service industry

Financial market participants rely on the timely and accurate information reported by Financial Institutions (FIs). Data collected from regulatory reports is vital for the early identification of threats to ensure both the institution’s stability and the overall financial services ecosystem.

In the recent years, Bank Negara Malaysia (BNM) and other regulators' expectations on reporting requirements from have only continued to expand – the monthly cycles of data gathering, report preparation, review, and delivery are growing longer with increased complexity. This is primarily due to an increase in data inputs, requests for more internal / external reporting and general business needs for data-driven analysis stemming from these reports.

Growing regulator expectations

Given the focus regulators have placed on regulatory reporting and the potential for improvement across the industry, it seems clear that now is the time for reporting to be considered a top strategic priority. Having a set of regulations enables an increased number of opportunities for businesses to develop a more integrated and efficient reporting processes.

With regulators increasingly identifying inconsistencies between what is reported internally and key regulatory returns, along with heightened reporting expectations from FI boards and management teams, it is prudent for institutions to consider how they’ll modify their reporting practices to meet all stakeholders’ needs.

The key components of the Deloitte regulatory reporting framework can also be used for internal reporting. Thus far, many institutions have been taking risk-based approaches— starting off with key regulatory returns, then submitting wider sets of returns, and, lastly, focusing on internal reporting to management and the board.

Deloitte Regulatory Reporting Framework

Meeting regulators’ expectations on regulatory reporting requires a robust methodology and starts with having a clear understanding of the key pillars of regulatory reporting as below.