City regulators the Financial Conduct Authority and the Bank of England are to deploy new technologies for increased data and analytics abilities as part of a major commitment to become more data-driven organisations.
The new strategy will see the FCA boost its use of advanced analytics and automation technologies in an effort to improve its efficiency in predicting, monitoring and responding to market issues.
As well as new investment in technology and use of external data, the FCA said it will establish a data science division for select departments to develop its data science resources in order to make it a core capability.
The regulator added that the data strategy will be delivered through “an ambitious portfolio of work” over the next five years, which will provide coordination across all data related projects and day-to-day activities.
FCA executive director of strategy and competition Christopher Woolard said: “Advances in technology are changing the nature of the firms and markets we regulate. Our data strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change.
“In keeping with our mission, a data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively.”
The Bank of England’s new approach to regulation follows the publication a study last year - the Future of Finance report - which saw the central bank commit to "seek ways to decrease the burden on industry and to increase the timeliness and effectiveness of data in supporting supervisory judgements".
As a result, the organisation has now published a discussion paper, which identifies a series of potential solutions to issues with existing data requirements to prompt feedback from the firms it regulates.
Sam Woods, deputy governor for Prudential Regulation and CEO of the Prudential Regulation Authority, added: “Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively.
“Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for them. This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade – our discussion paper starts that process by setting out the strategic issues in order to stimulate a debate about the way forward.”