Elixirr and Kaizen to aid financial institutions transaction reporting compliance

29 March 2018 Consultancy.uk 4 min. read

Last year, almost two thirds of transactions reported by financial institutions were incorrect, resulting in fines from the Financial Conduct Authority (FCA), while firms were unaware of these inaccuracies. In order to help address this, UK-origin consulting firm Elixirr has partnered with regulatory reporting assurance group Kaizen, to deliver a complete end-to-end regulatory reporting remediation service for financial institutions.

Data quality has been a continual problem under the original MiFID reporting regime, but the increased complexity of EMIR and MiFID II reporting obligations means that this will be even harder to achieve. In January 2018, MiFID II came into effect, having originally been scheduled for implementation the previous year. The sequel to the Markets in Financial Instruments Directive updates a number of rules from the original to improve the transparency of the European financial market and strengthen the protection of investors, further putting financial institutions under scrutiny to account for their transactions.

At the same time, regulators’ capacity to identify issues has widened, while the UK’s Senior Managers’ Regime adds pressure on individual managers within firms to ensure they are reporting correctly. Firms which fail to address reporting issues are at risk of multi-million pound fines, reputational damage, and the cost of internally remediating the problem. According to recent analysis of transaction reporting fines, conducted by the FCA by regulatory reporting assurance experts Kaizen, 65% of transactions were incorrect. On top of that, 58% of these reported transactions had actually passed validation – but contained inaccurate data.Financial institutions transaction reporting complianceIn a bid to change this, Kaizen’s technology solution will combine in a new partnership with consulting firm Elixirr’s remediation skills to help firms identify reporting issues quickly and ensure they are resolved and replayed, in a cost-effective, seamless way. The industry will see the firms collaboratively offer clients greatly-improved assurance testing, governance and support on their trade and transaction reporting remediation projects.

Founded by ex-regulator and MiFID architect Dario Crispini, Kaizen combines detailed regulatory knowledge with data science, supplying a unique approach to compliance assurance, checking every single item of transaction data for accuracy and completeness, while Elixirr provides practical and hands on support to resolve the reporting issues highlighted by the Kaizen assurance assessment. Elixirr, meanwhile, has a proven track record of working with financial services firms internationally to help them identify issues and achieve full and sustainable reporting compliance. The firm’s alliance with Kaizen follows hot on the heels of another new partnership in the financial services sector with Thomas Cook Money – with the two signing a strategic partnership to create a new holiday money solutions service.

Barry Lewis, Partner at Elixirr who led the formation of the partnership, said, “Kaizen have developed a service that is invaluable to the financial services industry, so we’re delighted to partner with them in such a value-added offering. This partnership means we can combine robust data quality assurance tools with the analysis and remediation expertise of our team, and help our joint clients respond even more effectively to the increasing needs for reporting compliance.”

Commenting on the partnership, Dario Crispini, CEO and Founder of Kaizen, added, “By combining the skillset and expertise of the two companies we are able to provide clients with greatly enhanced confidence and accuracy when reporting to regulators. The market is already responding well, and I have full confidence that this partnership will quickly benefit our clients and go from strength to strength in the months and years to come.”