RiskTech100 2024 Winner’s Spotlight: Regnology

Collecting the honours in the Supervisory Tech (SupTech) category for a third consecutive year is regulatory reporting specialist Regnology. The Frankfurt-headquartered company also takes home the award for Regulatory Reporting – Banking for the second year in a row and moves up six places in the overall ranking.

Linda Middleditch, Chief Product Officer at Regnology, believes the firm’s ability to serve the full regulatory value chain is intrinsic to its success. ‘We have worked tirelessly to move the regulatory reporting landscape forward by offering a full suite of solutions catering to both regulatory bodies and the financial institutions they regulate. We work with more than 35,000 financial institutions, over 60 regulators and tax authorities, as well as local experts and a strong partner ecosystem. All of which informs our platform and services so that we’re always on the cutting edge of regulation in the EU and beyond.’

Customer challenges

One of the greatest challenges facing financial institutions when it comes to regulatory reporting is that they are using outdated technology and processes, which struggle to keep up with increasingly data-driven regulations and reporting requirements. ‘Regulatory reporting is an area that has long been underserved by technology,’ states Middleditch. ‘The antiquated systems and clunky workflows that are typically in place across the reporting lifecycle have remained largely unchanged. This leads to inefficiencies and frustrations at all stages of the process.’

Regnology seeks to address these challenges with user-centric solutions that assist regulated firms by replacing manual processes with a unified data ingestion model. Middleditch explains, ‘By tapping into our suite of solutions, which cover the full gamut of regulatory, tax and transaction reporting, financial institutions can move away from time- and template-based reporting workflows. They can also set up the data governance needed to keep pace with increasing regulatory requirements, prepare for more frequent reporting cycles and provide supervisory bodies with full transparency.’

On the other side of the coin, Regnology’s offering also serves to help regulators and tax authorities improve the efficiency of their reporting, workflow management and data management processes. ‘By serving both the regulators and the regulated and working in close collaboration with both communities, we have a unique perspective on the regulatory value chain,’ states Middleditch. ‘Our software and platforms create industry-wide standards that enable regulators, tax authorities and financial institutions alike to increase efficiency and to transform reporting from what has traditionally been a retrospective process and bring it toward real-time automation.’

The shift to the cloud

Regnology has also invested heavily in ensuring that its solution suite employs the latest technology to give it an edge over the competition. In particular, there is greater customer demand for cloud-based services, which enable financial institutions to work with more granular data. Middleditch details, ‘Regulatory change in financial services has accelerated greatly because of new requirements and reinvigorated scrutiny around capital requirements, liquidity management, climate risk and so on. To satisfy these increasing demands, many of our clients, across multiple jurisdictions, have begun or completed their move to the cloud and increased their focus on data granularity.’

Regnology has long focused on data granularity as a reporting methodology, and this is paying dividends with the advent of new reporting requirements, including the European Central Bank’s (ECB) Integrated Reporting Framework (IReF), Basel IV and ESG reporting requirements such as Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosures Regulation (SFDR). ‘Rather than traditional template-based aggregations, all of these regulations call for detailed breakdowns of the underlying granular data, and at a far more frequent cadence than firms are used to,’ elaborates Middleditch. ‘Our solutions, which are purpose-built for these regulations, have proved a major boon for financial institutions scrambling to implement this level of depth in their regulatory reporting. And in turn, this has proved to be a major driver of our success over the last year.’

Rcloud

The launch of Rcloud, Regnology’s state-of-art cloud platform, in November 2022 is a good example of the firm’s commitment to investing in the latest technology. Powered by Google Cloud’s infrastructure, Rcloud means that Regnology’s solutions are made available to clients as a managed service, thus helping them to unlock further efficiencies. Middleditch explains, ‘Thanks to a combination of vertical and horizontal scaling, infrastructure-as-code, and an intuitive user interface (UI), Rcloud helps our clients address challenges around higher data quality standards. They can store more data, reconfigure it as they need and integrate it into any reporting workflow. And because we constantly update our solutions to stay ahead of the regulatory landscape, users immediately benefit from our most recent technological innovations in real-time.’

The first clients are now live on the Rcloud platform and more client onboardings are in progress. Aside from the wide-ranging customer benefits offered by Rcloud, the new platform will also help Regnology to strongly reduce its carbon footprint and achieve its aim of being carbon-free by 2030.

Acquisition activity

Alongside product developments, Regnology has also made five strategic acquisitions over the last year, which Middleditch states, ‘have served to deepen our use of modern, cloud-native technology, expand our market reach and enhance our ability to serve different parts of the regulatory reporting ecosystem.’

The acquisitions include that of Invoke, a French provider of financial, regulatory, and tax reporting solutions for supervisory authorities and reporting entities. The acquisition has bolstered Regnology’s existing position in the French market and has also enabled the firm to scale further its supervisory and tax business globally.

In May 2023, it also acquired the UK’s Metadata Technology, a specialist provider of Statistical Metadata and Metadata eXchange (SDMX) solutions for national statistic agencies and central banks. An ISO standard designed to describe statistical data and metadata, SDMX helps to improve efficient data sharing across statistics organisations. The addition of these capabilities to the Regnology stable has served to complement its Vizor SupTech data collection offering.

Strategic focus

From an ongoing strategic perspective, Regnology is focused on transforming the relationship between the regulators and the regulated. ‘At Regnology, we believe that bringing efficiency to the world of regulatory reporting will lead to a safer, more stable financial ecosystem,’ states Middleditch. “Beyond helping our clients prepare for new regulations and jurisdictional considerations, our key strategic aim is to transform relationships across the regulatory value chain and foster a culture of cooperation and support. Our core product strategy is to create integrated workflows between financial institutions and regulators – what we refer to as “first mile, last mile.” To facilitate this, we are taking a two-pronged approach of data standardisation and automation, which is bringing about a shared understanding and sense of engagement on both sides.’

To support these goals, Regnology is hosting its RegTech Convention, The Balancing Act of Reg and Tech, in November 2023 which will examine the regulator-regulated relationship and feature a full program on advanced technologies in regulatory reporting.

Future focus

Looking to the future, Regnology has a number of plans in the works. It has already announced its strategic shift in 2024 to a full cloud delivery model for its regulatory reporting suite, including Regnology Abacus for banking and transaction reporting, and Regnology Tax for client and regulatory tax reporting. It is also actively planning to expand geographically to better serve clients. In particular, it is looking to do more in APAC and North America and help clients solve the unique regulatory reporting challenges associated with these jurisdictions.

Alongside these developments, Middleditch points to a continued focus on data granularity, ‘We will continue our focus on regulations like IReF, Basel IV and ESG requirements. And we will also build on our longstanding expertise in granular data and continue to help our clients evolve in line with regulatory reporting expectations. Our clients look to us for education on what to expect in the coming months and years, as well as to provide them with the necessary tools to meet stricter reporting deadlines and remain compliant.’

Regnology is also investigating the role that artificial intelligence (AI) can play in helping both regulators and the regulated. ‘Chatbot-like features could assist in answering questions regarding rule interpretation or reporting cycle nuances,” says Middleditch. ‘However, there is no silver bullet when it comes to digital transformation and we will also continue to leverage shared data models, APIs and the cloud to lay a proper foundation to streamline reporting and supervisory workflows.’

Ultimately the firm’s aim is to continue to refine and develop signature solutions that empower both regulators and the regulated. ‘Regulatory reporting requirements are becoming more complex and data intensive, with real-time requirements. We want to mirror the ever-growing scope of regulatory reporting requirements and deliver added value where needed. In the SupTech world, we are looking into offering improved analytics for our SupTech solutions and in the RegTech world, enriched risk capabilities are a key consideration,’ concludes Middleditch.