Importance of Regulatory Reporting for BFSI Institutions

BFSI Institutions (Banking, Financial Services, Insurance, NBFC, Mutual Funds) are required to submit regulatory and compliance reports to central authorities (like CIBIL, RBI, IRDA, SEBI, AMFI, PFRDA). Teams in these organizations work diligently to furnish reports in the prescribed format, with zero errors and on time. These reports are critical, and slips of any kind could cause major setbacks to the institution.

Key Challenges of Manual Regulatory Reporting

  • Regulators have specific guidelines and requirements for periodic reporting. Adherence requires extensive operational time and effort if done manually.
  • Greater potential for errors, delays, and inconsistencies.
  • Risks of non-compliance and penalties.
  • No real-time statistics on Errors/Exceptions available based on non-adherence of guidelines.
  • Business growth and scalability lead to an increase in data sources, formats and volumes. Connecting old and new data sources becomes a huge challenge with varying systems, vendors and lack of APIs.
  • Building connectors to integrate these systems and applications is a specialized offering which may not be available in the internal IT teams of these institutions.

Automated Regulatory Reporting by Quickwork

Automating the generation of regulatory reports is no longer important but imperative. It can significantly improve business processes by streamlining manual tasks that are routine, repeatable, time-consuming and very labor-dependant.

Team members responsible for these reports should be well-versed in sourcing and incorporating the data. This expertise develops over time with experience in creating reports. It becomes a skill that must be transferred to be replicated.

The purpose of this solution is to enable teams to complete several hours of critical manual work in just minutes with little or no human involvement.

Let’s look at how reporting has evolved with this solution.

Take the instance of CIBIL Reporting. Banks and Fintechs are mandatorily required to report their positions every month to CIBIL. Earlier, to create the report, the business team extracted product-wise data from their LOS and LMS and manually transformed the data in a format prescribed by CIBIL. The manual report creation potentially took between 12-15 days every month, with the team having to extract the data, identify the exceptions, resolve them and transform the data to match the format. This process was done across multiple products with volumes exceeding 100,000 rows.

The final report was then uploaded onto the CIBIL platform to be assessed, qualified and scored. Organizations strive to meet a high data quality score and supersede their yearly performance. They also face the risk of rejection from CIBIL if the errors exceed the set threshold.

A manual process offered no quantitative view of the error statistics in the reports. But automating the reporting can help address these issues.

Key Features of Quickwork’s Automated Regulatory Reporting

Quicwork’s solution uses a frontend UI that the client can access for automated reporting. If the client provides LOS and LMS APIs, then the data can be extracted monthly using a scheduler. If the APIs are not available, then the LOS and LMS data are saved by a team member in the local drive.

When the team member runs the automation program, it picks up data from the local drive and runs it past the Business Rule Engine (BRE). The BRE contains the business logic predetermined by the client to validate the data and identify exceptions, duplicate records and null fields. The data is then transformed into the CIBIL Report. The client receives an email containing the Exception Report and the CIBIL Report in the prescribed format.

The entire process happens in minutes, from data extraction and transformation to generation. The client can fix the identified exceptions in the system, rerun the automation for an error-free CIBIL Report, and upload it on the CIBIL portal.

To join these processes, Quickwork’s solution has customized connectors to integrate all the systems. The BRE is built using Quickwork’s journey builder, which provides no-code/pro-code workflow capabilities with conditional logic and formulas.

Benefits of Automated Regulatory Reporting

1. Streamlined data extraction and integration: Quickwork’s automated reporting system can extract data from multiple sources, including internal and external systems, and integrate it into a single platform.

2. Straight-through Transformation: The platform offers straight-through transformation from data extraction, exception/error identification to report generation.

3. Flexible Configuration: The entire configuration is customized and adaptable to changes in the originating systems, business rules, data formats, and report formats. The client can change any aspect of this automated flow without disrupting or rebuilding it.

4. Dashboard/Logs for Error Statistics: The dashboard provides statistics around Error Logs which will help identify the most common errors used to improve the overall LOS/ LMS data capture process.

5. Enhanced Accuracy and Compliance: It reduces the risk of errors and ensures compliance with regulatory requirements.

6. Time and Cost Savings: It eliminates manual tasks, reduces the need for extensive resources, and ultimately saves time and money.

Automated Regulatory Reporting frees up significant time for teams to focus their efforts effectively. The evidence lies in the business impact numbers seen in this solution. A process that took 2 weeks every month has been cut down to 20-30 minutes a month.

To explore this solution for your business teams, contact deepak@quickwork.com and amit@quickwork.com for details/demo.