The sector is facing more stringent reporting requirements ahead of the introduction of the European Central Bank’s (ECB) Integrated Reporting Framework (IReF) in 2027 and Basel III, known as CRR3, which comes into effect in January 2025.

The IReF primarily focuses on meeting the ECB’s demands for banks’ balance sheet and interest rate statistics, securities holdings statistics, and more granular credit data. At the same time, the CRR3 banking package aims to strengthen the capital adequacy framework and take greater account of environmental, social, and governance (ESG) risks.

As a result, banks in the European Union are under considerable pressure, requiring extra time, manpower, and financial resources to meet their regulatory obligations. Others, due to legacy IT systems, are playing catch-up when it comes to regulatory reporting, according to a report by Deloitte.

The report says that banks will have to invest significantly in upgrading their regulatory reporting infrastructure and improving data quality. “This is not only to prepare for the regulators’ longer-term ambitions, but also – and much more immediately – to meet their current expectations. In doing so, banks need to identify opportunities to generate a return on their investment,” Deloitte adds.

Cloud-powered reporting is a game-changer

Cloud-powered regulatory reporting is emerging as a transformative solution to the traditional reporting process, empowering banks and financial institutions to achieve compliance with greater efficiency, accuracy, and security.

Cloud-based SaaS solutions enable the continuous deployment of new regulations or changes to existing rules without any action required from banks and financial institutions, ensuring cost savings and continued regulatory compliance.

Cloud-native solutions can dynamically scale up or down the reporting infrastructure based on a bank’s day-to-day needs. For example, when regulatory production is performed, the infrastructure scales up. Likewise, when regulatory production is not performed — which is quite often as regulatory reporting is a cyclical activity—the infrastructure scales down, thus saving on costs.

A cloud-based SaaS solution, therefore, offers a top-notch performance for banks to tackle the challenges ahead, particularly as regulatory reporting is becoming more granular.

Additionally, cloud solutions can seamlessly adapt to changing data volumes and regulatory requirements, ensuring that reporting infrastructure can keep pace with new regulations.

Cloud providers also offer robust security measures and disaster recovery protocols, safeguarding sensitive financial data and ensuring reporting continuity.

The cloud advantage

Other advantages of cloud-powered reporting include improved environmental sustainability, which aligns with ESG initiatives by boasting a smaller physical footprint than in-house setups.

The cloud also facilitates seamless data storage and stronger security measures and integration, resulting in better decision-making and improved accuracy in regulatory reporting.

Implementing a smooth transition to cloud-powered reporting

Careful planning is crucial for a successful implementation when transitioning to cloud-powered SaaS reporting. We have identified four key considerations to begin the process:

1. Security: Select trustworthy cloud service providers (CSPs) and software vendors that prioritize strong security measures and adhere to regulatory standards.
2. Strategy: Create a thorough data migration strategy to guarantee a smooth shift to the cloud, all while maintaining compliance with data privacy laws.
3. Training: It is vital to invest in training your team to ensure they have the required expertise to fully utilize cloud-based reporting solutions.
4. ROI: A SaaS solution will ensure a return on investment – and SBS has the solution to achieve this.

A cloud-powered SaaS solution is the future

Cloud-powered regulatory reporting is essential for future compliance as it offers banks and financial institutions increased efficiency, enhanced data security, and adaptability to evolving regulatory requirements.

While the upcoming is anticipated to intensify reporting demands, the banking and financial sector must also account for other regulatory requirements such as ESG, interest rate risk in the banking book (IRRBB), and the Basel III/CRR3 banking package. We believe cloud-based SaaS solutions are well-suited to address these challenges.

The cloud’s inherent scalability and flexibility enable seamless adaptation to new regulations, while SaaS providers continuously update their offerings to ensure compliance with the latest rules.

Leveraging a cloud-powered SaaS solution empowers financial institutions to confidently navigate regulatory changes with greater agility.

How SBS can help

In March, SBS introduced its Regulatory Reporting solution, which is integrated into our next-generation Sopra Banking Platform (SBP). The fully SaaS-enabled SBP Regulatory Reporting solution simplifies and transforms regulatory reporting procedures, including ESG, IRRBB, and CRR3, and provides financial institutions with a cohesive reporting experience that goes beyond conventional limitations.

The SBP Regulatory Reporting solution offers a range of benefits, including:

• Streamlined reporting processes through mutualization and rationalization.
• Proven track record of on-time and compliant reporting.
• Real-time insights into regulatory data through powerful analytics.
• Simplified deployment with record onboarding times.
• Subscription model for cost-effective reporting.
• Reduction in total cost of ownership through optimized resource allocation.
• Low code approach for easy configuration and customization.

Discover more about SBP Regulatory Reporting.

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