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October, 2022
Introduction:
Banks and securities firms must report a significant amount of information to federal and state regulators, and the pressure to do so is greater than ever. Some of their reporting requirements are individually unique to each institution, like call reports for banks or Form 13F for securities firms which trade equity and debt securities at a certain threshold. The complexity of this task has led many firms to outsource their regulatory reporting functions to third party vendors (TPVs). However, there are several aspects involved in the outsourcing process that require constant monitoring. These include the quality of service provided by different TPVs, cost-effectiveness, technological limitations arising from inefficient/clunky systems, and security concerns. This requires the implementation of an automation solution that can both reduce time spent on tedious manual execution, while ensuring greater accuracy and transparency in reporting.
Changed expectations around the speed, accuracy and level of detail in regulatory reports.
You might think that the only difference between regulatory reporting today and 10 years ago is speed. After all, what’s the point of sending data to regulators faster than you used to?
But it’s not just about speed. In fact, there are many ways in which regulatory reporting has changed over the last decade:
The beginning of a new decade is likely to be a turning point for regulatory reporting.
Regulators are increasingly demanding more transparency from financial institutions, and this will only increase in the years ahead. The future of regulatory reporting is cognitive intelligence automation (CIA), which offers automated compliance solutions that can help firms keep pace with the ever-changing regulatory landscape.
In the world of banking and securities, dealing with regulatory reporting is an extremely time-consuming and expensive process. The costs are high but they're also invisible, so it's easy to overlook them.
Manual processes are slow and costly, especially when results need to be completely reworked or corrected after regulators find errors.
Manual regulatory reporting processes are slow, costly and error-prone.
The cost of manual regulatory reporting is high. In fact, it’s estimated that 17% of an organization’s annual budget goes to compliance, much of which is spent on maintaining manual processes. When errors occur—and they will happen—they can take days to fix at best and require major rework at worst. Errors in financial statements could cost your business millions of dollars in fines or even worse: it could mean the end of your business.
Regulatory agencies monitor every aspect of their industries; they don't have time for manual reports that leave out key details or contain incorrect information. Even if a mistake isn't caught immediately by regulators, there's always a chance that someone else has noticed the problem before you've had time to correct it yourself.
Automating these tasks is the only way to meet these new expectations as efficiently and cost-effectively as possible.
Automation can save you time, money, and resources by eliminating manual processes that are error-prone and time consuming. And when something is automated, it's done consistently; there's less room for human error or oversight than with traditional methods. In addition, your team will be able to focus on other tasks instead of staying up late at night manually submitting reports.
That's where cognitive intelligence automation comes in.
Cognitive intelligence automation, or "CI automation" for short, is a process by which a machine can learn and adapt to the unique language and style of regulatory reports. In this way, it can help banks and securities firms automate the production of their own regulatory reporting.
For example: let's say that you're working on a report about how your company has been performing over the past year. Your supervisor tells you to include information on your company's balance sheet, income statement and cash flow statements. The report also requires that this information conforms with U.S Securities and Exchange Commission (SEC) rules on how those documents must be structured and formatted.
You could manually enter all of this data into an Excel spreadsheet in exactly the way required by regulators—but it would take hours if not days! And even then there's no guarantee that your work will be error-free because human mistakes are inevitable when dealing with such complex documents; when filling out forms like these using pen/paper or typing them up on Word documents there are bound to be typos here and there which may cause problems later down the road (eek!).
This exciting new technology uses artificial intelligence to reduce a highly complex task like regulatory reporting from days to minutes – sometimes even seconds.
The answer to this evolving problem is cognitive intelligence automation (CIA), a new technology that uses artificial intelligence, robotic process automation, natural language processing and machine learning to automate regulatory reporting.
You’ve probably heard of artificial intelligence (AI). You may have even seen or read about it in the news. But what is it? How does it work? And why should a banking or securities firm bother using AI for regulatory reporting?
Well, let’s take a look at how cognitive intelligence automation works. First of all, AI is simply software that makes decisions based on data and its analysis of that data. While many people think of AI as robots stealing their jobs and taking over the world – not to mention scaring their kids – there are actually quite a few benefits to using this technology in your company:
Increased efficiency: Automating compliance processes means less time spent manually entering information into spreadsheets, which frees up employees' time so they can focus on other important tasks. This increased efficiency will also help you save money by not having to hire additional workers just to do these menial tasks like filing reports with regulators.
Not only does this save time, but it also enables analysts to focus on high-value work that requires human expertise and judgment, rather than routine tasks like report data entry, verification and analysis.
The automation of regulatory reporting is a win-win: it helps you meet your compliance requirements while freeing up valuable analyst time to focus on higher value tasks.
Compliance with regulatory requirements is essential for any securities firm -- doing so in an efficient and timely manner is even better.
Compliance is a time-consuming, costly process that requires human expertise and judgment. It also exposes you to significant fines if you make mistakes.
Firms need to be aware of their responsibilities as well as the risks associated with not complying with regulations or reporting requirements on time.
The dawn of a new decade will likely bring stricter expectations of transparency from regulators and investors alike.
The dawn of a new decade will likely bring stricter expectations of transparency from regulators and investors alike. The financial climate has changed significantly since the 2008 global financial crisis, with increasing scrutiny from both parties. This has led to greater emphasis on regulatory reporting and compliance, as well as an increase in fines for non-compliance.
It’s important for firms to be able to provide detailed information about their operations on short notice, with accuracy and speed – something that can be achieved through automation. Companies are already turning to artificial intelligence (AI) technology for help with these tasks; AI is ideal for automating data collection, analysis and reporting processes in order to achieve compliance faster than ever before. As one example of how AI could assist with regulatory reporting: by analyzing thousands or millions of pieces of data at once using sophisticated algorithms that understand what they mean together—something no human could do alone—the system can generate reports based solely upon its own findings without any manual input required by analysts or other staff members.
Conclusion:
With the dawn of a new decade, financial services firms need to be prepared for increasing regulatory expectations. The answer is Algonox cognitive intelligence automation (ACE), a new technology that uses artificial intelligence and machine learning to automate regulatory reporting. This exciting new technology will not only help you meet these new requirements more efficiently and cost-effectively than ever before, but it can also enable analysts to focus on high-value work that requires human expertise and judgment -- rather than routine tasks like report data entry, verification and analysis. Compliance with regulatory requirements is essential for any securities firm - doing so in an efficient manner is even better!