Financial services firms globally must contend with the increasing and evolving regulatory burden associated with market transparency. Born out of the 2008 Financial Crisis, regulators in every region have imposed an ever-increasing requirement on market participants to disclose details of the trades they execute. This reporting requirement serves as a complex and potentially burdensome obstacle to new business unless managed effectively and efficiently.
Capco partnered with our client on a multi-year strategic redesign of their regulatory reporting ecosystem to develop an industry leading transaction reporting capability alleviating the operational burden of compliance and mitigating regulatory reporting risk during a period of significant regulatory change.
The challenge
In today’s regulatory landscape, adapting to ongoing changes in global transaction reporting requirements demands a strategic, agile and innovative approach. Our client partnered with Capco to:
- Manage the rewrite of regulatory mandates across multiple regimes simultaneously
- Migrate reporting from legacy systems onto a new scalable strategic solution
- Strengthen their control framework
- Implement a revised data strategy
- Improve internal reporting metrics and enhance user functionality and experience of reporting tooling.
How we helped
We deployed a multi-disciplinary team across the client’s operating model to deliver a range of projects.
Emir 2 system re-platforming
Our team led the migration of the client’s OTC Derivative Transaction Reporting from a legacy platform to a scalable global system, supporting the creation and delivery of over 500 technical and field attribute change requirements aligned to industry best practice. We implemented a full end-to-end reporting system and control framework, with an improved daily reporting success rate over 99.7% regulatory acknowledgement. Additionally incorporating improved data quality with data reuse across G20 regimes.
Emir refit compliance and readiness
We provided comprehensive support for the client’s EMIR Refit compliance, interpreting EMIR fields across all ETD and OTC asset classes and ensuring adherence to new Regulatory Technical Standards. Using full traceability and regression testing tools, we enabled accuracy and reduced compliance risks, ensuring readiness for April 2024 regulatory deadlines and enhancing data consistency across reporting functions.
Global transaction reporting remediation & optimization
We optimized the client’s multi-jurisdictional reporting by migrating to a compliant vendor-supported solution and developing a strategic target operating model with clear governance and accountability.
Enhanced control framework, management information, and usability
To strengthen the client’s control framework, we improved reporting user interfaces (UIs), built automated testing tools, and delivered data-driven dashboards for proactive issue management.
Value delivered
The client now boasts an industry leading regulatory reporting system that delivers a >99% ACK rate and has the scalability and flexibility to adapt to regulatory or business driven changes. The key benefits to the client are:
- Reduced manual effort by way of controls automation for internal reporting; trade amendments and back-reporting utilising citizen developer or low code tooling such as Alteryx and Power BI
- Improved reporting accuracy - real-time performance dashboards replaced lagging measures
- Faster, data-informed decisions, ensuring a robust foundation for future asset class integrations
- Data strategy allows for reduced compliance costs by aligning practices globally in response to the trend towards global harmonization; with more than 70% of datapoints moved to upstream ownership, compensating logic in the reporting tool has reduced by ~80% and resulted in a significant reduction in the estimated £15m annual cost of error correction
- Full end-to-end data lineage and regulatory traceability
- Automated front-to-back and regression testing allowing greater coverage of complex booking models across all asset classes.
Across these projects, we demonstrated our ability to deliver strategic, scalable, and compliance-ready solutions. Our expertise helped establish a future-ready reporting infrastructure for our client, addressing evolving regulatory requirements and setting a foundation for long-term success in transaction reporting. This was achieved in full partnership with the client’s teams as we scaled and matured with the operation.