5 Considerations for Evaluating RegTech Solutions

Colleagues review notes together with laptop and coffee.

On the heels of the May 30th reporting deadline for Form N-PORT, it’s important to discuss RegTech and the growing pressure regulatory reporting has had and will continue to have on our industry. Regulations are playing a more significant role in asset management than ever before. Regardless of what domicile you operate in or the types of products you provide to your clients, you are likely feeling the increased pressures of regulatory reporting. Firms are now required to not only provide human-readable reports to regulators, but there is also an increased demand for machine-readable reports. In addition to the XML or other machine-readable based formats, regulators are looking for more detailed information. Liquidity analysis and counter-party credit exposure are being added to the list of other data elements, including holdings information provided by your accounting book of record.

What’s worse is that these regulators are changing regulations often. With increased pressure and tighter timelines, firms have been forced to either ramp up resources devoted to regulatory reporting or find software or service-based solutions to solve for this growing demand. If your firm has decided it’s time to implement a RegTech solution, keep this short list of questions and considerations on hand when evaluating the best system or service for your regulatory reporting needs.


Does the proposed solution or service have a built-in data management foundation or is the expectation that you already have your data in good order? You know the old adage garbage in, garbage out. Ensuring you have a firm handle on your data sets the foundation to build a solid regulatory reporting practice.


Does the solution you’re evaluating meet your agility requirements? When the regulator changes the schema, and they most likely will, consider how quickly your vendor can get that new schema in your hands.

Quality Control

What types of built-in validations does the vendor or service provider offer to give you confidence that the report you’re sending to the regulator is accurate? Do they allow you to build your own validations such as cross form checks or period over tolerances? A good solution will include an out of the box set of validations. A great solution will allow you the ability to build your own validations.


How old is the vendor’s offering? How many of your peers have established a relationship with the vendor? When talking regulatory reporting, experience has told me it’s good to be with the crowd. 


The windows to provide regulatory reports are shrinking. Firms need to collect, aggregate, validate their data, calculate responses, and confirm the accuracy of the reports, in some cases, within 30 days of month end. A system or provider who can automate as much as possible should be near the top of your list.

The regulatory reporting landscape for asset management is quickly changing and it’s prudent to be prepared for the requirements of today and tomorrow. It’s important to not only ensure you collect, aggregate, and organize necessary data, but also validate the data to have confidence that the information passed to regulators is correct. However, data is only part of the challenge. As the regulatory burden to asset managers continues to grow, you must ask the right questions and factor in all considerations to be sure that your chosen solution can support scale and meet the fast pace of regulatory change.