FCA and Bank of England propose changes to improve data and analytics

The Financial Conduct Authority (FCA) and the Bank of England has revealed plans to enhance its data and analytics capabilities to enhance monitoring of the UK’s financial sector.

In the new Data Strategy it sets out a transformation plan for it to become a highly data-driven regulator. Both the FCA and Bank of England rely on high-quality data to maintain monetary and financial stability, market integrity, competition and consumer protection.

Its new strategy states it will focus on using advanced analytics and automation techniques to help it effectively predict, monitor and respond to market challenges.

The regulator will increase investment into the technology and take measures to better understand other opportunities it presents. This will include the establishment of data science units in parts of the organization.

FCA executive director of strategy and competition Christopher Woolard said, “Advances in technology are changing the nature of the firms and markets we regulate. Our Data Strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change.

“In keeping with our Mission, a data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively.”

The Bank of England has published a discussion paper to help it improve its data collection from firms across the financial system. Its paper outlines the challenges in its current data collection system and identifies potential solutions to these.

The FCA, the Bank of England and seven regulated firms have also published a viability assessment report on digital regulatory reporting (DRR). The DRR would allow firms to automatically supply data requested by regulators to lower cost of collection, improve data quality and lower burdens of supplying data.

Prudential Regulation Authority CEO Sam Woods said, “Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively. Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for firms.

“This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade – our Discussion Paper starts that process by setting out the strategic issues in order to stimulate a debate about the way forward.”

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