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How to obtain CRD IV regulatory obligations and new ITSs analysis in a few clicks

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Daitomic, the RegTech solution for a more accurate and real-time financial compliance

All those activities that fall within the so-called regulatory alerting - namely the collection and analysis of the regulatory updates issued by the banking regulators, in order to assess their impact and possibly transpose them - currently impose to financial institutions the use of a large number of resources, both economic and human, and of time. Regulatory changes, in fact, are more and more frequent and numerous especially following the financial crisis of 2008, but also as a consequence of the continuous and very quick technological and social evolutions. This is why, in recent years, the team at Aptus.AI has thoroughly analyzed the banking compliance processes to define a generalized and standardized workflow - available on this dedicated page - and to identify all those steps in which the technology, and in particular Artificial Intelligence, can help financial institutions. This is how Daitomic was born, the RegTech solution that offers compliance professionals automatic and real-time regulatory updates. In recent months we have presented in our blog several examples of regulatory areas affected by high-impact changes on the banking landscape, such as the ESG objectives field, the so-called "Quick fix" to MiFID II, the AML regulatory area, the PSD2 regulatory perimeter and the various regulatory changes to the CFSP - and not only - related to the sanctions imposed on Russia by the European Union. The time has therefore come to focus on another central issue in the European banking regulatory context, namely the updates to the CRD IV recently issued by the EU, which have changed the ITSs to which financial institutions are subject.

New EU updates to the Capital Requirements Directive IV: here's what changes

As usual, to introduce the topic, it is appropriate to clarify the acronyms we used with respect to the mentioned regulatory area. In fact, the three letters "CRD" stand for “Capital Requirements Directives”, designating the European Directives that regulate the prudential regulations for banks and investment firms, issued in 2000 with the first measures package and then updated during the years. These EU Directives have also been accompanied by Capital Requirements Regulations - hence the acronym CRR -, always relating to the same regulatory framework. Going deeper in the CRD IV analysis, the Bank of Italy defines it, within the Act issuing the seventh update to Circular 285, as follows: "Directive 2013/36/EU updates the overall prudential regulations for banks and investment firms, contains provisions on remuneration and incentive policies and practices in banks and banking groups" in order "to ensure correct incentives for risk taking, the sustainability of remuneration with respect to capital and liquidity conditions, monitoring of possible conflicts of interest, with a view to healthy and prudent management". The latest news on CRD IV concerns the publication, which took place on 30 June 2022 in the Official Journal of the European Union, and the entry into force (21 July 2022) of the Implementing Regulation (EU) 2022/951, which updated the Implementing Technical Standards (ITSs) about the reporting obligations for financial institutions related to the calculations results on own funds requirements. This document amends the previous Implementing Regulation (EU) 2016/2070 and continues the process of adopting the international accounting standard IFRS 9, started with Regulation (EU) 2016/2067 and focused on the valuation of credit losses, on the amount of own funds requirements and regulatory ratios to be disclosed. The acronym IFRS stands for "International Financial Reporting Standards", issued by the IASB (International Accounting Standards Board), and identifies the new accounting standards for the classification, measurement and valuation of financial instruments, with respect to which the CRD IV update is part of the roadmap of the European Banking Authority with respect to their adoption within the European financial system.

How to obtain regulatory alerting and automated analysis of CRD IV in real time

The analysis of the entire regulatory perimeter concerning the CRD IV implies a continuous regulatory updating work by the financial institutions. But how can this impact analysis be carried out accurately and quickly? Finally, financial institutions can count on valid support: Daitomic, the RegTech solution - created and developed by Aptus.AI - which exploits Artificial Intelligence to answer the need of real-time regulatory updates and to automate those steps of compliance workflows - presented on a dedicated page - which fall within the regulatory alerting process. Thanks to its AI engines, Daitomic creates a standard, electronic and machine readable version of banking regulations, thus enabling an automated data analysis in order to offer compliance professionals the opportunity to focus on the decision-making and strategic aspects of their profession. How? Firstly, Daitomic allows users to interactively navigate financial regulations and compare their different versions to identify the changes introduced by each new regulatory update.

Immediate and accurate information to optimize compliance processes? Yes, with Daitomic‍

Not only. Daitomic also includes a customizable email alert function, which informs users in real-time about the updates falling into the regulatory areas of their interest. The message includes all the most important general information about the new update, including an overview of the impacted regulatory areas, but mostly it refers directly to the consultation area within the platform.

However, Daitomic does not stop at regulatory alerting, since it is also able to prepare a first impact analysis on the perimeter identified by the regulations of interest. Once the email has been received, users can in fact exploit the platform to automatically extract the related regulatory obligations and link them with the internal processes impacted.

With the regulatory obligations automatic extraction feature, Daitomic completes also the last of the financial compliance processes among the ones which require a great consumption of time and resources, thus allowing humans to carry out the activity in which they are truly essential and that no technology will ever be able to do instead of them: make the right decisions and develop strategies. Booking a demo of Daitomic is easy and for free, just by clicking below!

Daitomic is an Aptus.AI company solution