THE Financial Conduct Authority and the Bank of England have outlined plans to develop their data and analytics capabilities.
The FCA aims to be a highly data-driven regulator focussing on the use of advanced analytics and automation techniques to deepen its understanding of how markets function to allow it to efficiently predict, monitor, and respond to market issues.
The regulator will also invest in skills and new ways of working to enable it to better understand and use data and new technology.
This will include data science units in selected parts of the organisation to exploit new opportunities arising from the FCA’s migration to cloud-based IT infrastructure.
The Bank of England has published a Discussion Paper (DP), Transforming data collection from the UK financial sector, to improve the timeliness and effectiveness of data collection from companies across the financial system.
The paper sets out the issues facing the current data collection system and identifies and explores a series of potential solutions, to prompt feedback from and further discussion with industry.
In addition, the FCA, the Bank of England and seven regulated firms have jointly published a Viability Assessment report on the latest Digital Regulatory Reporting pilot which pilot will potentially allow firms to automatically supply data, reducing cost of collection, improving data quality and cutting the burden of data supply on the industry.
In response to the announcement, the Personal Finance Society has warned data alone won’t prevent future consumer detriment.
Keith Richards, chief executive of the Society, said: “It is vital that the regulator has the right data to inform rules but data alone isn’t enough to prevent future consumer detriment.
“It is vital data is accompanied by human insight to ensure developments in the market are thoroughly understood. Digital breadcrumbs can’t replace the knowledge gained by speaking to those who assist consumers.
“There is also a danger that a desire to streamline data collection might mean that different assets might be treated as the same, simply to create large ‘buckets’ for counting in a standardised way across the sector. This, in turn, might lead to an over-simplified view of the market.
“I am pleased the regulator will work with firms to ensure data collection is less burdensome. The regulator needs to ensure the market understands how this information will be used.”