The FCA’s transaction reporting overhaul could force financial institutions to confront weaknesses hidden within their data infrastructure, according to regulatory intelligence specialist FinregE.
The Financial Conduct Authority’s PS26/15 is intended to make transaction reporting simpler by cutting the number of fields firms are required to submit. But while fewer data points may appear to reduce the compliance burden, FinregE argues the changes could instead expose how difficult some organisations find it to trace and manage their regulatory data.
For firms with complex technology estates, the real challenge may sit behind the reporting form. Data can pass through multiple systems before reaching a regulatory submission, with each stage potentially involving different processes, transformations and controls. Removing or changing fields can therefore have consequences far beyond the reporting team.
FinregE said this is particularly problematic where firms have limited visibility of their data lineage. Legacy spreadsheets, undocumented processes and employee knowledge can all become dependencies, making it difficult to understand what will be affected when reporting requirements change.
That creates the risk of errors going unnoticed. A change may appear to have been implemented successfully while inaccurate information continues to flow into regulatory reports. FinregE refers to this as a “silent failure”, where problems remain hidden until they result in regulatory scrutiny or expose wider weaknesses in data quality.
The firm believes PS26/15 should consequently prompt firms to examine the architecture supporting their reporting processes. Rather than treating the policy statement as another technology project with a fixed implementation deadline, businesses could use the changes to identify where regulatory data is difficult to track, update or validate.
Dynamic regulatory mapping is one approach FinregE advocates. This would give firms a centralised view of their regulatory obligations and the systems, processes and data affected when requirements change. Instead of teams manually working through spreadsheets and documentation, changes could be traced across the organisation to identify the areas requiring action.
This approach is incorporated into FinregE’s Regulatory OS, which provides a live regulatory logic layer alongside tools for horizon scanning, regulatory mapping, governance, assurance and workflow management. Its AI RIG engine is designed to support these capabilities and reduce firms’ reliance on static compliance documentation.
FinregE CEO Rohini Gupta said, “The true burden of compliance is not the number of fields the FCA requires, but the fragility of the systems used to populate them. If a firm finds it difficult to remove three fields from a report, it is a diagnostic signal that their entire reporting architecture is too rigid. We are proposing that PS26/15 be viewed not as a routine IT chore, but as a strategic invitation to fix the plumbing of the institution.”
Gupta added, “The regulators are streamlining their expectations; it is time for firms to streamline their architecture. PS26/15 is a litmus test for operational resilience.”
The warning points to a broader issue facing compliance teams as regulatory requirements increasingly depend on data moving reliably between interconnected systems. Simplifying what regulators ask for does not necessarily simplify the technology required to produce it.
For financial institutions, PS26/15 could therefore become a useful stress test. Firms with clear data lineage and adaptable reporting infrastructure should be better positioned to implement the changes, while those dependent on manual processes and institutional knowledge may discover that fewer reporting fields reveal deeper problems within their compliance architecture.
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