The Problem with Manual Reporting
Regulatory reporting automation means pulling return data straight from a firm's own systems, checking it automatically against the FCA's rules, and keeping a full record of every step before a named senior manager signs it off. For most FCA-regulated firms the quickest gains come from the most frequent, data-heavy returns, such as the monthly safeguarding return that payment and e-money firms have filed since May 2026.
Many FCA-regulated firms, particularly small and mid-sized payment institutions, EMIs and consumer credit firms, still rely on manual processes for regulatory reporting. This typically involves extracting data from multiple systems, consolidating it in spreadsheets, applying manual calculations and entering data into the FCA's RegData platform.
Manual processes create several risks:
- Data entry errors that lead to inaccurate submissions
- Formula errors in spreadsheets that go undetected
- Missed deadlines because data preparation takes longer than expected
- Key person risk where only one individual understands the reporting process
- Lack of audit trail making it difficult to demonstrate data integrity to the FCA
These risks are not theoretical. The FCA regularly identifies reporting accuracy as a concern and has taken enforcement action against firms for persistent reporting failures.
What Is RegTech?
RegTech, regulatory technology, refers to software solutions designed to help firms manage regulatory compliance more efficiently. In the context of regulatory reporting, RegTech solutions typically provide:
- Automated data extraction: Direct integration with the firm's core systems (payment platforms, accounting software, CRM, safeguarding ledgers) to extract reporting data automatically.
- Data validation: Automated checks to identify errors, inconsistencies and outliers before submission. This includes cross-referencing data points, checking for completeness and validating calculations against regulatory rules.
- Reconciliation: Automated reconciliation of reporting data with underlying source records.
- Submission support: Producing returns in the format RegData accepts, ready for review, sign-off and upload.
- Audit trail: Comprehensive logging of all data processing steps, providing a clear audit trail for regulatory review.
- Dashboard and alerts: Real-time visibility of reporting status, upcoming deadlines and outstanding actions.
Benefits of Automation
Accuracy. Automated data extraction and validation significantly reduce the risk of errors. When data flows directly from source systems to reporting outputs, the scope for manual mistakes is minimised.
Timeliness. Automation compresses the reporting preparation timeline. What might take several days of manual data preparation can be completed in hours, ensuring firms submit well within FCA deadlines.
Cost reduction. While RegTech requires upfront investment, it reduces ongoing compliance costs by freeing staff from repetitive data preparation tasks. This is particularly impactful for firms that submit multiple returns across different regulatory frameworks.
Scalability. As firms grow, processing more transactions, operating in more jurisdictions, adding new products, manual reporting processes become increasingly unsustainable. Automated systems scale naturally with business growth.
Risk reduction. By removing manual steps, automation reduces key person risk, audit risk and the risk of regulatory penalties for late or inaccurate submissions.
Enhanced analytics. Automated reporting data can be used for internal analytics, enabling firms to identify trends, benchmark performance and make data-driven business decisions.
Where to Start
| Return | Frequency | Why it suits automation |
|---|---|---|
| Monthly safeguarding return (SUP 16.14A) | Monthly, 15 business days | Twelve returns a year built from reconciliation data the firm already holds |
| Fraud statistics (SUP 16.13) | Every six months | Transaction-level data from payment systems |
| Complaints data (DISP 1.10 and 1.10B) | Annual or twice a year | Data from the complaints log, and a new single return from 2027 |
| Capital returns (FSA056, FIN060) | Annual | Figures from the accounting system and own funds calculations |
Firms holding a UK electronic money institution licence or UK authorised payment institution licence usually start with safeguarding and fraud data.
Selecting a RegTech Solution
When evaluating RegTech solutions for regulatory reporting, firms should consider:
- Regulatory coverage: Does the solution support the specific returns the firm must submit? Solutions designed for banking prudential reporting may not cover payment services returns and vice versa.
- Integration capability: Can the solution integrate with the firm's existing systems? The value of automation depends on the ability to extract data directly from core platforms.
- FCA compatibility: Does the solution support submission to RegData? This includes compliance with the FCA's data formats, validation rules and submission protocols.
- Flexibility: Can the solution accommodate changes to reporting requirements? The FCA periodically amends returns, and the solution must be adaptable.
- Security and data protection: Regulatory data is highly sensitive. The solution must meet appropriate security standards and comply with data protection requirements.
- Vendor track record: Assess the vendor's experience with FCA-regulated firms, their support arrangements and their financial stability.
Implementation Approach
Successful RegTech implementation follows a structured process:
Phase 1: Data mapping. Map all reporting data points to their source systems. Identify any gaps where data is not currently captured electronically and determine how to address them.
Phase 2: System integration. Configure integrations between the RegTech solution and the firm's core systems. This may involve API connections, database queries or file-based data transfers.
Phase 3: Validation rules. Configure the solution's validation rules to match the FCA's reporting requirements. This includes calculation logic, cross-validation checks and completeness rules.
Phase 4: Parallel running. Run the automated process in parallel with the existing manual process for at least one reporting cycle. Compare outputs to identify discrepancies and fine-tune the automation.
Phase 5: Go-live and monitoring. Switch to the automated process and monitor closely for the first few reporting cycles. Maintain the ability to revert to manual processes if issues arise.
Phase 6: Continuous improvement. Regularly review the automated process to incorporate regulatory changes, improve data quality and extend coverage to additional returns.
The FCA's Position on RegTech
The FCA has been actively supportive of RegTech adoption. Through its Innovation Hub and regulatory sandbox, the FCA has engaged with RegTech firms and encouraged regulated entities to explore technology solutions for compliance challenges. The FCA has also signalled a longer-term move towards machine-readable regulatory reporting, which would further incentivise automation.
The FCA and the Bank of England run a joint Transforming Data Collection programme to make regulatory data collection more efficient. The FCA has also removed returns it no longer needs. Known changes ahead include a single complaints return replacing five existing returns, with the first reporting period from 1 January to 30 June 2027 (PS25/19), and operational incident and third-party reporting rules from 18 March 2027 (PS26/2). Cryptoasset firms authorised under the new regime will report from 25 October 2027, and firms applying for UK cryptoasset authorisation should plan their reporting systems now.
Practical Considerations for Smaller Firms
Not every firm needs an enterprise-grade RegTech platform. Smaller PIs, EMIs and consumer credit firms can achieve significant improvements through simpler automation approaches:
- Template automation: Standardised spreadsheet templates with built-in validation formulas and data import capabilities.
- Accounting software integration: Many modern accounting platforms offer reporting modules or integrations that can automate elements of financial reporting.
- Outsourced reporting: Engaging a compliance service provider that uses automated tools to prepare and submit returns on the firm's behalf.
The key principle is to reduce manual handling of data at every step, regardless of the sophistication of the tools used.
Regulatory Outlook
The direction of travel is clear: the FCA expects higher-quality, more timely regulatory data, and technology is the enabler. Firms that continue to rely on manual, spreadsheet-based reporting processes face increasing risk as reporting requirements expand and the FCA's analytical capabilities improve. Investing in reporting automation, whether through dedicated RegTech platforms or simpler process improvements, supports both compliance and efficiency.
Regulatory Counsel maps reporting obligations, designs validation checks and reviews returns before submission. Contact us for a written proposal.
Frequently asked questions
RegTech (regulatory technology) refers to software solutions that automate compliance processes. For regulatory reporting, RegTech tools can extract data from core systems, validate it against FCA rules, reconcile it with source records and prepare returns for RegData, reducing errors and saving time.
Yes. The FCA supports innovation through its innovation services and runs a joint Transforming Data Collection programme with the Bank of England to modernise how it collects data. The FCA views technology as an enabler of more accurate, timely and granular regulatory data collection.
Cost depends on the number of returns covered, the systems that need connecting and whether the vendor hosts the tool. Template automation is the lowest-cost option. Integrated platforms usually charge an annual licence plus set-up. Ask vendors to price against the same list of returns and data sources so quotes can be compared.
Yes. Smaller firms can achieve significant improvements through simpler approaches such as standardised templates with built-in validation, accounting software integrations or outsourced reporting services. The key is to reduce manual data handling at every step, regardless of the sophistication of the tools used.
Usually the monthly safeguarding return. It is due within 15 business days of every month end and draws on reconciliation data the firm already produces, so automation saves the most time and reduces the risk of figures that do not match the firm's records.
No. The firm remains responsible for accuracy and timeliness, and a named senior manager should still review and approve each return before it is submitted.
Definitive guides on this topic
The permanent reference pages this article relates to.
Safeguarding and CASS 15
Safeguarding arrangements, reconciliations and the CASS 15 regime.
UK Electronic Money Institution licence
FCA EMI requirements, EUR 350,000 capital, safeguarding, cost and timeline.
UK Authorised Payment Institution licence
FCA API requirements, own funds methods, safeguarding, cost and timeline.