How Bank Treasuries can meet the demands of regulatory reporting faster and better
Since the financial crisis of 2008, financial institutions have been exposed to a tsunami of growing regulatory scrutiny – and as organisations expand and operate across borders, treasuries increasingly need to comply with multiple local as well as international regulations.
It requires substantial resources to comply with the complexity of financial regulations, not to mention the resources spent on keeping up to date and understanding the implications of new rules, process and control refinement, collating additional data and supporting new reporting onuses.
That’s why you should deploy digital solutions to ease the administrative – and very time-consuming – burden of complying with the increasing regulatory requirements.
Read along to see how a treasury management solution can help financial institutions overcome regulatory challenges and help them establish more efficient processes and reporting workflows.
Key challenges of regulatory reporting for Treasury Managers
In our experience, there appear to be a number of common challenges when it comes to successfully managing regulatory requirements such as fragmented data systems, time-consuming data manipulation, interpreting complex regulations demands, team competencies, and effective governance of processes.
- Multiple sources of information: FINREP, BASEL, LCR, CR, NSFR, ORBOF etc. Nowadays, banks need to collate data for various reports (and most often in various formats). Unfortunately, banking is also an industry overwhelmed with shadow IT. And depending on the depth of information required, Treasury Managers need to collate data from different sources to meet reporting requirements. Typically, a setup consists of several various systems such as trading systems, systems for risk, accounting and portfolio management, as well as a notable amount of complicated spreadsheets and VBA code. Essentially, this creates a mashup of numerous systems not originally designed to interact reliably and securely.
- Data silos and inaccuracy of data: Financial statements, risk reports, new assets classes, and complex investment strategies. Information is exchanged through and used in various formats, putting immense pressure on data quality. If decisions or reporting are based on incomplete and outdated information, it affects returns, risk picture and compliance. As a result, Treasury Managers spend a considerable amount of time cross-checking data accuracy.
- Lack of skilled resources: Successful embracement of digital transformation in Treasury departments demands new skillsets and capabilities. Furthermore, hiring professionals with skills in high demand but short supply isn’t cheap – which is why upskilling your current workforce and implementing new technologies to free up resources can help you become more flexible to meet changing requirements.
So, how do you make sure you’re geared and prepared for managing the regulatory complexities?
You prepare by implementing a Treasury Management solution that can help you manage and reduce complexity, a solution where most time-consuming things are streamlined, simplified and automated.
Get easier reporting with a treasury management solution
Seeing the crucial need for a better way to manage and accomplish regulatory reporting requirements, Vitec Aloc developed a solution 10 years ago, based upon a proven and reliable investment management solution used by pension funds and Asset Managers alike over many years, which consolidates data from various sources and automates draining and time-consuming manual tasks.
It’s important for us to stress that the solution PORTMAN will not magically make all worries disappear, but the solution is an enabler to streamline and get a handle on your vital hygiene factors. A single-platform solution that gives you a solid foundation for your real-time calculations, pricing, risk management and the increased automation of your accounting process.
Let’s look at some of the benefits of a Treasury Management solution…
- Cash visibility
Cash visibility and forecasting will become significantly easier with a Treasury Management solution. Both short- and long-term forecasts are nearly impossible when data is stored in disparate systems across the organization. By creating a single source of truth that breaks down silos, Treasury Managers can enhance visibility and mitigate risk.
Regulators are increasingly requiring banks to maintain sufficient capital and liquidity buffers and have a robust control environment to monitor and manage risks. A Treasury Management solution like PORTMAN enables Treasury Managers to monitor and control balance sheets exposures. With PORTMAN you can achieve improved and trusted governance with investments, by implementing the technological infrastructure necessary to master the increasing complexity of investment opportunities; a decision many have been making as of late.
- Accounting and reporting
Timely, accurate and complete data on various positions and exposures is a necessity for regulatory reporting. But without a proper setup, accounting and reporting can take an exorbitant amount of time. A Treasury Management solution helps aggregate and collate data from various sources and systems, making regulatory reporting easier and more efficient.
Using PORTMAN for your regulatory reporting
Many clients use PORTMAN for authority reporting to varying degrees:
- Calculation and extraction of relevant figures via custom reports for subsequent processing in the company’s own systems
- Tax reports for reporting of tax information
- Specially designed solutions for selected areas, such as NFSR, FINREP and large exposure reporting
Other examples of government reporting include liquidity coverage ratio (LCR), Common Reporting (COREP) and ORBOF reporting in Norway.
Mikkel Severin Lyngbye
- Chief Sales Officer
- Tel.: +45 2999 7141
- Email: firstname.lastname@example.org