It all starts with data - an interview with Suade

Walk us through the journey of Suade Labs so far. How did it all start, and where are you now?

Suade has had an exciting journey so far. We were founded in 2014 by Diana Paredes and Murat Abur, two former bankers who had ambitions to innovate and challenge the status quo within the financial services industry. The increase in regulations since the 2008 financial crash created a gap in the market for emerging tech to solve complex issues. Suade was built upon our belief that taking a data driven approach to regulation is the first step towards preventing the next financial crisis. We have gone from strength to strength since our conception due to our proactive and technology driven attitude to regulatory reporting, ensuring our clients are ahead of the curve. We now support  many financial institutions of varying size and function across the world and we are continuing to scale up.

You work a lot with data, and lately there has been an emphasis on the importance of data and its use in finance and regulatory fields. Could you elaborate on that? What role does technology play here?

Obviously, data is key in any business and particularly within finance. To meet its regulatory obligations, a firm must provide thousands of data points to the regulator on a regular basis. The real problem comes when you need to interrogate and understand these data points quickly and easily, as each of these have thousands or even millions of inputs themselves. This process needs to be repeatable and, in some cases, must be undertaken on a daily basis.

This level of analysis isn’t possible when you have to do this manually in excel, therefore, firms must automate this process as much as possible. With any automation project, having a good strong data discipline is key to being able to perform these processes in a timely and cost efficient way. And the increasing granularity of the data required for regulatory compliance means automation is becoming more important, but also, more strategically valuable to financial institutions to carry out their functions effectively. Ultimately, Suade’s goal is to ensure the financial system is more efficient, stable and transparent and this is our approach when dealing with each client, starting with the data.

What are the challenges of financial institutions when it comes to complying with regulations from a data perspective?

As I touched on above, financial institutions face many challenges when it comes to data if they do not have the right tools in place, and this is not helped by the changing nature of the inputs, as regulators change the reporting requirements on a very frequent basis. For example, at the moment, we are migrating a client onto the European reporting requirements under CRD V and helping investment firms to understand and implement their new requirements under IFR. IFR in particular for investment firms is proving tricky for some as they now need to be able to look through into their funds and understand the constituent parts. Otherwise, they will have to hold a capital weighting of 1250% and this kind of data was not necessarily being captured before by them.

Regulators are asking firms for more and more granular data with regulations like Anacredit looking at pure granular data from a bank rather than it being processed before being sent to the regulator. For us, the future of regulatory reporting will look similar to this, with granular data reporting being combined with more traditional type reporting. This gives the regulator a comprehensive view of a firm’s position and allows them to perform analytics much more easily on the market as a whole, rather than relying on a firm’s individual interpretation of their data. Some regulators are even talking about being able to pull this data directly from the firms themselves. This is where client’s of Suade will be much more prepared than those using the legacy systems, as our technology is already positioned to deal with the future.

Which countries or regulators are the furthest ahead with regards to modernising financial regulation? 

There are several regulators that are doing a lot in this area, however broadly speaking all regulators are looking at ways to embrace technology and modernise regulation in line with the changing market. The UK regulators are making significant progress with projects like the DRR (digital regulatory reporting) initiative and the transforming data collection plan. The MAS in Singapore also does some interesting projects and is fostering innovation, and the ADGM in the UAE is pushing the boundaries of traditional regulation. Suade has worked closely with regulators around the globe including the Bank of England, FCA, SAMA, MAS and many more as our vision to reduce the regulatory burden on firms using emerging technologies is fast becoming the mainstream.

As firms are having to adapt to increasing speed of digitisation, regulators are too. Agile governance is something that Suade has worked closely with regulators on through our work with the World Economic Forum’s Agile Nations Charter. This is being supported by numerous intelligence sharing exercises and forums like the Basel innovation centre, who are looking to try and apply these innovative new practices globally.

Your work and research have led to the FIRE data format. Can you tell us more about this initiative and why a standard data format is so important?

FIRE is an open-source regulatory data standard that we started, that looks to define at a granular level, everything that financial institutions need for their regulatory reporting requirements at an atomic level. FIRE uses legal and widely accepted definitions in order to define these data attributes and this is something that regulators are definitely looking at doing as well. The BoE and EBA both published papers on this subject in the last month and are looking at how to implement something like this. The difference between their projects and ours is that it is live and being used by firms already to assist them in defining their regulatory data already. 

Data standards are key to being able to implement more advanced technologies (like NLP, ML and AI). They ensure that there is a level playing field for all firms to be able to comply in a cost effective and simple manner and reduce the amount of unnecessary resource spend on bespoke data mapping and configuration exercises. This helps to lower to cost of regulation for firms, while providing a better experience for regulators, who get better more accurate and comparable data from all the firms that they supervise.

What sets Suade apart from other solutions in the regtech space?

A whole host of things, not least our approach to data. When financial institutions use data standards, they will reap many other benefits like increased transparency and performance, as well as improving the implementation process. If you look at the benefits of using Suade’s solutions over the legacy systems of our competitors, they are not comparable. There are huge benefits of using emerging technologies like saving time, cutting costs, improving efficiencies and making the job more enjoyable, to name just a few.

Suade is uniquely placed in the marketplace to anticipate and fulfil the regulatory requirements, not only of today but also those in the future. We can react far quicker than any other provider in the marketplace in this industry, minimising disruption for our clients when new regulatory changes happen. But it goes beyond just formatting your data for the purpose of complying with the regulators. By using a data standard, Suade's solution provides a single source of truth for all your decision making (regulatory or not). In other words, regulatory compliance is no longer a cost in the balance sheet of the bank, and becomes a source of competitive advantage and enhanced business intelligence to supplement strategic decision making.

About Enzo Casasola

Enzo Casasola is the Head of RegTech at Suade. He oversees the development of FIRE and the Suade software solution suite, as well as customer support and product implementation. In his time at Suade, he has overseen the expansion of the open-source data standard, known as FIRE, to multiple jurisdictions and has increased the scalability of the Suade platform. Enzo also holds a MBA from the London Business School.

About Suade

Suade's benchmarked software is bridging the regulatory gap through modern technology enabling financial institutions to understand and deliver their regulatory requirements efficiently. We combine practical banking experience with legal and operational expertise while leveraging on academic research to create an optimized solution. Suade's data driven approach is designed to prevent the next financial crisis! Our approach to data and use of innovative technologies such as Natural Language Processing and AI to turn regulation into code has been recognised by regulators and authorities around the world such as the European Commission, FCA and the MAS.