Global Trustee and Fiduciary Services News and Views Issue 50

Global Trustee and Fiduciary Services News & Views | Issue 50 | 2018 63 The major achievement in executing the Proof of Concept (PoC) came when the rule governing Customer Account reporting was changed. Once the rule change was captured in SmaRT and expressed in RDF, the software application executed over the changed rule, and populated the appropriate fields in FSA 001 form with the required data. No change in the software algorithm was required. Referring back to figure 1, ModelDrivers (ModelDR) played a key role in Labyrinth navigation through the TechSprint Wiki. But of greater significance was the creation by ModelDrivers of ontological models that will help scale up the findings and make digital regulatory reporting a reality in the enterprise. During the sprint, the ModelDR application was integrated with SmaRT in order to demonstrate how SMEs could capture domain knowledge (here on regulatory provisions) and use this as an input to semantic models expressed in OWL. Such models are currently being built at great cost by major banks. The ability to have business professionals participate in this process is argued to make this process more efficient and help address the aforementioned Tower of Babel problem. This approach also helps scale up the PoC to a working enterprise-wide solution. The future is digital regulatory compliance The BoE and the FCA want to make digital regulatory reporting a reality. Hence, they have instituted two 6-month pilot R&D projects with eight retail and wholesale banks. These commenced in June 2018 and sees regtech and suptech being applied seamlessly. In planning the endeavour, participants implicitly note Nizan Packin’s warning on the downside to regtech. She argues that its adoption “requires a carefully tailored design of the technology, a joint effort of the regulators and the private sector and some shifts in corporate thinking.” 12 However, the regtech, suptech and fintech genies are out of their respective bottles, and a major problem facing the industry is the growing number of proprietary solutions from multiple vendors, none of which are aligned around a common model or infrastructure. It has been brought to our attention by executives from Globally Systemic Important Banks (GSIBs or GSIFIs) that the last thing they want is to have multiple fintech and regtech solutions, from multiple vendors, adding to the proliferation of applications across their institutions and to the burgeoning “spaghetti pots” of code and data. It was in response to the need for an industry-wide, standards-based approach that the BoE and the FCA instituted the TechSprint in 2017 and launched its related Call for Input: Using technology to achieve smarter regulatory reporting in February 2018 (FCA, 2018), which prefaced the FCA’s two ongoing Digital Regulatory Reporting Pilots. Throughout, both the BoE and the FCA are advocating the adoption of open-source technologies and open-semantic standards, such as those developed by W3C, to link and make machine-readable and -executable structured and unstructured data across heterogeneous sources. Hence, the focus is on XML/RDF/Turtle/ JSON-LD, ontologies (in OWL) and related standards, such as SBVR, and its extensions to express regulatory vocabularies and rules. It’s clear from our experience that large financial institutions are beginning to address the core problems of data governance and data virtualisation using these technologies.