In March 2019, Goldman Sachs was fined £34.4 million ($41.9 million) by the UK Financial Conduct Authority (FCA) over failures to provide accurate and timely reporting relating to 220.2 million transaction reports between November 2007 and March 2017. The bank also erroneously reported 6.6 million transactions to the FCA that were not, in fact, reportable.
In the same month, UBS was fined £27.6 million by the FCA for failings related to more than 135 million transaction reports. The investment bank had also failed to fully control and take care to organise its reporting operations, regulators said.
Following the financial crisis, banks worldwide have faced tougher scrutiny. Regulators have had their reputations on the line; the result has been a flow of increased regulation, including the revised Markets in Financial Instruments Directive (Mifid II), which took effect in January 2018. The demands on financial institutions have increased dramatically when it comes to the quality of reporting and control frameworks.
Seeking to reduce the burden on firms is Kaizen Reporting, founded by former UK Financial Services Authority manager Dario Crispini. Through its ReportShield system, the regtech firm has combined regulatory expertise with data science to create a suite of regulatory reporting technologies and services.
One of the company’s differentiators is that its founder was instrumental in implementing the first Mifid regulation. But its software is also fundamentally different from other regtech options. It has a unique ability to test all of a company’s data and in all data fields rather than just samples of data, which may not capture the full picture.
Its accuracy testing module enables clients to automatically assess the quality of their reports, test their accuracy and identify compliance errors at the source. Its test coverage is fully transparent while delivering granular metrics on reporting quality across business lines. As a result, firms are able to generate a consistent view of reporting activities from all parts of the business and analyse detected errors to prevent regulatory action.
ReportShield brings complete reporting controls to its clients, which include banks – such as NatWest, JP Morgan and Nomura – fund managers and brokers. By providing full compliance to financial institutions, ReportShield ensures regulatory obligations such as Mifid II, the European Market Infrastructure Regulation, Dodd‑Frank and other Group of 20 regulations are met, reducing reputational risks and giving firms the confidence to focus on running their businesses.
With Mifid II requiring institutions to test for accuracy and completeness in reporting, and having adequate oversight arrangements to identify and rectify problems, ReportShield could not have been developed at a more crucial time. Kaizen wins this year’s Global Technology Provider for Regulatory Compliance Award for its important work in the field.