Every company has to comply to various regulatory requirements, and they need to build the necessary information technology solutions to ensure compliance. It can get very expensive to build standalone solutions for each regulatory compliance requirement, as these requirements keep evolving with time.
It is necessary to build a generic framework that can host any regulatory requirements solution, so that it can be effectively managed. Here are the three main pillars of a generic regulatory compliance framework:
Central Data Store
Banks and financial institutes need to store all the data about their clients and counterparties, in a manner that is traceable to the source. They need to be able to demonstrate the integrity and quality of their data.
Banks and financial institutes need to put in place a strong rules engine, that can scan their customer’s data to identify the impact of various regulations on their customers, products and businesses.
Whenever a bank onboards new customers, they have to scan them against all the regulations to understand the documentation requirements for their regulatory onboarding. The banks need to understand which products and services can be offered to them and what are the applicable regulatory reporting obligations.
Regulatory Reporting framework
The banks and financial institutes need to put a strong reporting framework in place that is capable of reporting large volumes of data in real time across multiple jurisdictions. The regulatory reporting frameworks should be able to reproduce any historic report to the regulators, if requested by the regulators.