Over the past decade, financial institutions have faced an unrelenting wave of new regulatory requirements.
With Basel 3.1 on the horizon, firms are being called to go beyond box-ticking exercises and instead embed regulatory reporting within their strategic frameworks. This shift marks a defining moment for the sector—one that invites transformation rather than mere adaptation.
In a new ebook, ALMIS International has delved into how firms can leverage Basel 3.1 to make a strategic change to compliance. The ebook, ‘From compliance to strategy: The next evolution in Regulatory Reporting’ can be downloaded here.
Historically, regulatory reporting was treated as an operational formality. Firms would compile the necessary data and submit it to regulators with minimal strategic consideration. However, as regulatory expectations intensified, particularly from the Prudential Regulation Authority (PRA), the process evolved into a more sophisticated, data-driven operation. Many organisations now have dedicated reporting teams, reflecting the growing scale and frequency of regulator demands.
Recent PRA communications, including the well-known ‘Dear CEO’ letters issued in 2019 and 2021, underscored deeper concerns within firms’ reporting structures. These letters identified weaknesses such as over-reliance on manual spreadsheets, inconsistent governance, and insufficient investment in data quality and infrastructure. The regulator’s message was clear—compliance alone is not enough; firms must ensure their reporting systems are resilient, accurate, and strategically aligned.
Basel 3.1 introduces the next phase of this evolution. The framework requires financial institutions to strengthen their internal processes, enhance their data models, and ensure traceability across every stage of reporting. Even under the simplified regime for Small Domestic Deposit Takers (SDDTs), the increased complexity of requirements demands significant operational upgrades.
For many institutions, this presents both a challenge and an opportunity. Those still dependent on fragmented systems and manual controls risk falling behind, while firms investing in automated, centralised platforms can gain a decisive advantage. Beyond compliance, robust data management can drive efficiencies, reduce errors, and enable better strategic decision-making.
The Metro Bank case remains a cautionary example of why regulatory accuracy is paramount. The broader message is that firms can no longer afford to rely on patchwork systems and outdated methodologies.
Basel 3.1 provides an ideal moment to act. Firms that modernise their reporting infrastructure, strengthen data governance, and align their compliance functions with broader business goals will not only meet regulatory demands but also unlock new strategic value.
Download ALMIS’ latest ebook to explore how to turn regulatory change into strategic growth.
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