Amidst the dynamic landscape of global finance, characterized by innovation and increasing regulations, the demands on regulators and their regulated entities have grown exponentially. The advent of SupTech, which focuses on utilizing technology to enhance financial supervision, has become crucial in this context. Regulators are now incentivized to seek more timely and granular data from regulated entities, enabling them to identify vulnerabilities and risks for more effective supervision. However, this desire for granularity necessitates a shift away from traditional reporting processes toward automated information flows between regulators and the regulated. Yet, the implementation of SupTech poses common challenges.
Within the realm of SupTech implementation, regulators face a myriad of internal challenges. Limited resources, competing priorities, an overly complex regulatory environment, and budgetary constraints severely hamper their capacity to implement critical oversight functions and enhance regulatory infrastructure.
SupTech Implementation Challenges
Limited resources or skillsets are a pressing concern, as the demand for technical talent across the globe continues to grow. Regulators often find themselves managing their jurisdictions with only 30 to 50% of the necessary resources, falling short of meeting oversight demands.
Competing priorities further compound the challenges faced by regulators. Besides addressing significant backlogs of business requirements, regulators must navigate external factors such as pandemics, climate disasters, and staff productivity issues. This results in depleted resources and an even larger backlog of supervisory requirements.
The overly complex regulatory environment adds to the challenges. As regulatory requirements evolve, regulators must enhance existing systems or adopt new specialized systems. Consequently, regulators end up supporting multiple isolated legacy systems that lack integration and do not interface with each other effectively. This necessitates the use of data warehouses to consolidate reports and gain a comprehensive view of regulated entities' activities. However, these legacy systems often fall short of meeting current needs, requiring significant effort or financial investment to make necessary changes.
Budgetary constraints exacerbate the difficulties faced by regulators. Adapting legacy systems to evolving regulatory requirements either demands a doubling of technical resources or an increase in the annual operating budget. Given the impracticality of these options within required timelines, regulators are forced to prioritize changes, leaving some regulatory processes broken or insufficient, thereby exposing jurisdictions to potential market abuse or failure.
Empowering Your Regulatory Organization
To overcome these common challenges, the industry needs to strategically simplify the technical environment and reduce dependence on scarce technical resources. Empowering business users to make simple changes to the regulatory environment without relying on third parties is crucial.
Effective supervision requires the adoption of an efficient oversight solution, especially considering the proliferation of fintech and new technologies. Choosing a robust SupTech platform equips regulators with advanced tools to monitor and oversee major financial regulatory objectives.
Implementing a comprehensive low-code/no-code SupTech solution streamlines the technical environment and facilitates the easy configuration and automation of required regulatory oversight functions. By putting business users in control, these solutions enable rapid adaptation to evolving business requirements and provide regulated entities with a unified interface for interactions with regulatory bodies.
An easy-to-use, drag-and-drop SupTech facility empowers users with no coding experience to quickly respond to policy changes, legislation, standards, and best practices. This frees up technical resources to focus on more specialized tasks. Additionally, low-code/no-code SupTech solutions offer low-risk options for significant business process and form changes without jeopardizing software integrity or production environments.
To future-proof regulatory environments, SQL Power's SupTech platform emerges as a game-changer. It empowers business users, eliminates IT resource constraints, addresses current regulatory needs, integrates seamlessly with existing systems, and readily adapts to future regulatory requirements.
Regardless of whether it's a Central Bank, Financial Services Commission, Insurance Regulator, or Securities Exchange Commission, the SQL Power platform offers the long-awaited solution to catch up on oversight functions backlog and easily adapt to changing jurisdictional needs. With SQL Power, regulators can gain confidence in overseeing regulated markets, setting a new standard in SupTech-driven financial supervision.
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