Customise your regulations using RegTech tools such as e-Reg

Customize regulations using RegTech tools

RegTech companies offer the banking sector a wide range of regulatory and compliance management services. Some of these RegTechs, such as easyReg, specialise in tasks requiring the exploitation and analysis of regulations. Nowadays, RegTech tools of this type are able to go further than just processing standard texts. Discover the various layers of solution offered by such RegTechs , from its foundation to all possible customisations.

1 – RegTech tools: standard features for managing regulation in banks

Let’s focus first on the foundation offered by RegTech tools for managing regulatory data and information.

1.1 – What does a Regulatory Technology application do for regulatory management?

The new technologies exploited by RegTech companies combined with regulatory research constitute a real winning combo for their users. Indeed, one of the major difficulties faced banks and consultancies is the wealth and complexity of regulations.

So a Regtech solution like e-Reg offers a wide range of functions, from regulatory knowledge to collaborative information management and regulatory project management. Here is the main scope of such a tool :

  • search for regulatory texts that need to be applied in Switzerland ;
  • broaden the analysis by accessing the entire regulatory context surrounding the query made in the tool ;
  • have access to draft changes to the texts ;
  • manage and structure knowledge within a bank or law firm (comments, information sharing, regulatory libraries).

1.2 – Benefits of new RegTech-type technologies for managing banking compliance

This type of RegTech tool provides comfort and peace of mind for people whose work revolves around regulations. Let’s summarise the benefits for regular users :

  • improved compliance and reduced risks of non-compliance and the associated costs ;
  • time savings for financial services staff ;
  • development of regulatory knowledge and skills, particularly for new recruits ;
  • digitisation of tasks and traceability of regulatory analyses and research.

1.3 – What are the standard regulations generally covered by RegTech solutions like e-Reg?

Our e-Reg online platform includes a base of regulations common to all users. In a way, it is the documentary standard accessible to everyone.

Here are the databases that we integrate into the RegTech tool, representing thousands of pages of financial regulations :

  • acts, ordinances and FINMA orders applicable to financial services in Switzerland ;
  • explanatory reports, comments and consultation reports issued by FINMA and the FDF ;
  • self-regulation, i.e. positions, recommendations and guidelines published by the AMAS and the SBA ;
  • other data relating to regulatory changes, i.e. outside the laws mentioned in Art. 1 of FINMASA ;
  • certain European Union regulations affecting banks in Switzerland ;
  • international texts, such as those relating to Basel III final.

1.4 – RegTech tools and the regulatory context: example of a query on the e-Reg platform

As standard, our Regulatory Technology solution provides access not only to the results of regulatory research, but also to the entire context. This includes additional information such as additional reports and the history of financial regulations. It helps to enrich reflection and documentary analysis.

Would you like to understand what we make available to e-Reg users in banks or law firms? Here is an example of a regulatory search on the e-Reg platform for the expression “liquidity stress test”.

The window at the bottom of the screen gives access to the context, in this case the extract from the explanatory report of 4 November 2020, which deals with the subject of proportionality for stress tests in small banks.

liquidity stress test

2 – Some RegTech solutions go further in terms of regulation

In addition to this standard block offered by traditional RegTech tools, with e-Reg we provide other functionalities. We enable our customers to add additional regulations directly on the platform.

2.1 – Regulatory research: the needs of the financial services sector

Our customers express the need to centralise official Swiss regulations as well as their internal procedures or directives in one centralized place. Sometimes, for uses that are specific to their bank or their particular business, users would like to be able to consult, comment and share extracts from regulations outside of Switzerland. These may be European or international laws or regulations, for example.

2.2 – On-demand modularity of our RegTech tool

Given the needs of the financial services sector for efficient organisation and optimum compliance, we offer modularity in addition to the standard process. This ensures that users of our RegTech application have access to all sources of information centralised in a single, shared space within their institution.

2.2.1 – Possible integration of external regulations into e-Reg

The ability to add to the e-Reg regulatory information database directly within the tool widens the scope of what can be done. For example, if a customer wishes to add external regulations to meet the needs of an external establishment, this can be envisaged. In fact, the database can be expanded on demand.

2.2.2 – Possible option for a banking institution’s internal regulation module

One of the innovations we have introduced into the RegTech application is the ability to insert a financial institution’s own directives and procedures. This addition is  made in a totally secure and segregated environment. As a result, employees working in the regulatory field have access to all sources of documentation, both internal and external, for each search. This simplifies collaborative project management within teams.

To find out more, read our article on this subject. It will give you a better understanding of how and why your bank’s internal regulations should be integrated into our RegTech tool.

2.2.3 – Possibility of adding to the standard if this is a plus for all users

Finally, please note that we may decide to enhance the standard base of regulations in e-Reg. This is particularly the case if a specific need expressed by a bank or consultancy is of interest to all users. That’s why our RegTech platform is scalable. What’s more, innovation is in our genes. We are constantly thinking up and deploying new functionalities, thanks to technology, in particular Artificial Intelligence (AI). One example is semantic search or vector search, a real enhancement for exploiting regulatory data.

This type of personalisation service offered to our customers in the RegTech application improves the work of our employees. With more regulations available, users are better able to comply with regulatory requirements. It’s one way of reducing the risk of non-compliance in the companies that are responsible for them. Nothing beats a personalised demonstration of the e-Reg tool. Choose a slot directly on Enrico Giacoletto’s calendy.

The complexity of financial regulation is no longer an inevitability in Switzerland

Financial regulation complexity

Acts, regulations, circulars and standards are piling up and piling up, whether it is in Switzerland, the European Union or at the level of other international bodies. The result is undoubtedly that financial regulation is genuinely complex. However, simplifying what is complex demonstrates a thorough understanding of the subject. Faced with this situation, as experienced by Swiss banks and the consultancies that support them, how can we turn this philosophy into a reality in the regulatory field? Regulatory Technologies, known as RegTech, now provide practical solutions. Find out how in this article.

1 – Regulatory provisions that accumulate and complicate compliance

Financial regulations in Switzerland involve thousands of pages of documentation. Furthermore, the complexity is increased by the fact that regulatory provisions are constantly evolving in order to adapt and respond to the various global financial crises. Yet, Switzerland seeks to reduce this complexity for small banks. It has introduced the concept of proportionality into banking regulation.

1.1 – Multiple sources of regulatory information

Whether the regulatory provisions are Swiss, international or drawn up at European level, for example, all banks are faced with the complexity associated with the sheer volume of information.

Depending on the subjects and reports to be processed financial regulatory management requires consultation of, among other things

  • FINMA acts, ordinances and circulars ;
  • explanatory reports, comments and consultation reports issued by the FDF and FINMA, i.e. 620 pages for 2022 alone ;
  • regulatory sources related to changes in self-regulation (comments and texts of the SBA and AMAS) ;
  • draft legislation, such as the one relating to Basel III final ;
  • regulatory changes induced by legislation other than financial regulations.


1.2 – The complexity of financial regulations is also due to ongoing changes

The balance often remains precarious between too much financial regulations and a lack of regulation in certain areas. For each global banking crisis, there is a corresponding change in legislation. For example, it was in the wake of the 2008-2009 crisis that the Basel Committee began work on Basel III and then Basel III Final.

The new global upheavals, both in the United States and in Switzerland, will probably lead to further changes. Particularly in terms of regulatory ratios, the liquidity risk and interest rate risk aspects are likely to evolve. All these developments contribute to increasing the complexity of financial regulation in Switzerland.

1.3 – Swiss regulators seek to reduce complexity for small banks

Faced with this difficulty in implementing regulatory requirements, Switzerland has introduced simplification measures for the smallest financial institutions. Since the beginning of 2020, small banks have been exempted from certain prudential requirements.

However, FINMA emphasizes the importance of a dynamic approach in its article “Experiences with the small banks regime” published in the small banks dossier. In the same extract from the 2021 Annual Report, it adds that “other possible relaxations will therefore have to be considered in the future when drawing up or updating the regulations”.

2 – A tool to cope with the complexity of financial regulation: RegTech

As written by BSI Economics in 2017. “The complexity of regulation and supervision of the financial system has indeed required several layers of regulation, with the aim of financial stability, aimed at encouraging international cooperation and convergence of standards, both at European and international level.” This is a fact. However, thanks to RegTechs, this complexity is not inevitable.

2.1 – What is a RegTech and what areas does it cover?

RegTechs offer specialised services to financial institutions to manage compliance. RegTech players use technologies such as artificial intelligence, big data, the cloud and automation.

The areas of intervention are numerous. From data protection and anti-money laundering to regulatory monitoring and compliance management, RegTechs cover the full range of regulatory complexity.

2.2 – e-Reg: a RegTech solution to simplify regulatory management in Swiss banks

By adopting a RegTech tool such as the one offered by easyReg, a bank or a consultancy working with financial institutions is able to grasp the complexity.

2.2.1 – Our RegTech mission

Our company’s mission is to simplify all regulatory work. Whether you work in the finance department of a bank, a law firm or a consultancy firm, with the e-Reg SaaS platform, you can benefit from the following advantages :

  • quickly identify the right information in all Swiss and international regulations ;
  • save time in your regulatory management activities ;
  • reduce the cost of compliance as well as the risks of non-compliance ;
  • use a RegTech tool to manage regulatory changes in a collaborative spirit.

2.2.2 – Example: easier document management for special regulatory processes

The holidays are approaching. Are employees within your bank or consultancy firm worried about their backups, who are responsible for replacing them while they are away? You may want to reduce the complexity of financial regulation work scattered across teams. With the e-Reg tool, your teams can organise delicate or arduous tasks in advance.

This is the case for the documentation of special processes relating to regulatory reporting in Switzerland. The same applies to episodic tasks that require detailed study of the regulations. Our platform helps your teams save time by providing clear, up-to-date and easily accessible documentation.

Don’t miss out on RegTech tool available progress. It is possible to implement an adapted technological process designed for the specificities of Switzerland. It relieves the banking sector and all its financial services staff responsible for regulation. Reducing time and costs, limiting risks, streamlining exchanges and managing regulatory changes, RegTech helps to make compliance less complex. If you want to see by yourself, there’s nothing better than an online demo of e-Reg !

Basel III and Basel III Final: where does Switzerland stand?

bale III et bale III final point étape 2023

In the month of July 2022, the Federal Council and the Swiss Financial Market Supervisory Authority (FINMA) launched a consultation for the purpose of applying the latest Basel III measures in Switzerland. Do you know how the project progresses? Why is it now called Basel III Final in Switzerland (or “end game” in the US) rather than Basel III? What are “Basel IV” and “Basel consolidated”? What’s new for 2024? As Reg Tech specialists, we answer all your questions in this article and provide you with the essential documentary sources you need to know.

1 – Basel III final: what banks need to know

The Basel Committee on Banking Supervision (BCBS) aims to strengthen the global soundness of financial systems. It also aims to ensure efficient prudential supervision and good quality exchanges between banking regulators. It is managed by the central bank governors and banking supervisors of 28 countries, including Switzerland.

1.1 – Basel III and Basel III Final: strengthening banking supervision

The Basel Committee’s work resulted in the issue of rules known as standards, i.e. the minimum that banks and supervisors must apply. The reform known as Basel III is the latest standard in force. Since 2010, it has supplemented Basel II, following the global financial crisis of 2008. The member countries of the Basel Committee are committed to incorporating these measures into their national legislative frameworks.

Basel III strengthens the level of regulatory capital by raising the minimum solvency ratio to 10.5%, compared with 8% in Basel II. The reform also provides for a leverage ratio, which is the ratio between the total assets held by the bank and its equity capital. Finally, it defines the short-term liquidity ratio (LCR) and the long-term liquidity ratio (NSFR).

1.2 – Implementation of Basel III final in Switzerland

The introduction of Basel III final into law includes a revision of the Ordinance on Capital Requirements (OFR). It also includes a complete overhaul of the texts detailing the implementation of the OFR. Circulars 2013/01, 2015/03, 2008/21 (equity capital section), 2017/07, 2016/01 and 2008/20 are repealed. New ordinances of the Swiss Financial Market Supervisory Authority replace them (see below).

1.3 – When will Basel III come into force in Switzerland?

The consultation launched in July 2022 by the Federal Council and the Swiss Financial Market Supervisory Authority was completed in 2023. The amendment to the Capital Adequacy Ordinance, adopted by the Federal Council on 29 November 2023, will come into force on 1 January 2025.

FINMA’s press release of 27 March 2024 also announces the publication of the ordinances to implement Basel III final in Switzerland. These will come into force on 1 January 2025, at the same time as the corresponding changes to the Capital Adequacy Ordinance.

We list all these regulatory changes in a later part of the article, updated in April 2024.

2 – Why talk about Basel III final?

The Basel Committee on Banking Supervision refers to the Basel III reform. However, the second part of the package is actually called Basel III Final.

2.1 – The Basel Committee adopts an initial set of measures

In the wake of the 2008 financial crisis, the shortcomings of the Basel II standard came to light. In 2010, the Basel Committee quickly approved a new regulatory framework for banks and financial institutions. The first version, published in December 2010, was updated in June 2011. However, this is only the first part of the reform requirements. For Switzerland, these initial measures are detailed in the communication from the Federal Department of Finance (FDF) dated 1 June 2012.

2.2 – The other Basel III reforms will be incorporated into Basel III final

On 7 December 2017, the BCBS finally published the final applicable Basel standards. As a result, this section on strengthening banks’ capital according to risk is called Basel III final, as opposed to the first wave of reforms, which dates back several years.

The provisions of Basel III final include risk weightings with various ratios based on company ratings. The standards also incorporate a new approach to operational risk. In Switzerland, Basel III Final will lead to the July 2022 consultation launched by the FDF and FINMA.

2.3 – Basel IV or Basel III final: the Basel Committee has chosen

During the work to implement the Basel III measures, several years after the first series of reforms, two terms emerged: Basel IV and final Basel III. In the end, the BCBS chose Basel III final, as indicated in its 2017 publication.

3 – Regulatory texts and other information on the Basel III final reform in Switzerland

Here is some other useful information and in particular the new ordinances.

3.1 – Where can I find the key texts?

Are you looking for the key articles on this banking supervision reform? Take a look at the following sources:

3.2 – List of new ordinances

You will find all the documentation (draft ordinances, explanatory reports, information on the hearing, etc.) on the FINMA website. Go to the archive of hearings completed in 2022.

The following FINMA ordinances were published at the beginning of 2024:

  • TBEO-FINMA (the Ordinance on Trading book and Banking book and Eligible capital of banks and securities firms) relates to the trading book and the bank’s book, as well as the capital taken into account of banks and securities houses. It replaces FINMA Circular 2013/1 ‘Recognised own funds – banks’.
  • LROO-FINMA (the Leverage Ratio and Operational Risks of Banks and Securities Firms Ordinance) relates to the leverage ratio and operational risks of banks and securities firms. It replaces FINMA Circular 2015/3 ‘Leverage ratio-banks’ and the parts of FINMA Circular 2008/21 ‘Operational risks-banks’ that are still in force.
  • CreO-FINMA (the Ordinance on the Credit Risks of Banks and securities firms) deals with the credit risks of banks and securities firms, replacing the former FINMA circular 2017/7 ‘Credit risks-banks’.
  • MarO-FINMA (the Ordinance on the Market Risks of Banks and securities firms) deals with the market risks of banks and securities firms. It replaces FINMA Circular 2008/20 ‘Market Risks – Banks’.
  • Finally, DisO-FINMA (the Ordinance on the Disclosure Obligations of banks and securities firms) concerns the disclosure obligations of banks and securities firms. It replaces FINMA Circular 2016/1 ‘Publication – Banks’.

3.3 – What is the Basel consolidated format?

In April 2019, the Basel Committee on Banking Supervision (BCBS) brought together the various global standards for banking regulation and supervision. The aim of Basel Consolidated is to bring together all the regulatory provisions and to clarify and simplify the existing standards, without adding any new ones. The approach is explained in this document concerning Basel Consolidated.

4 – How can e-Reg help you with Basel III?

In the face of these ongoing regulatory changes, it is vital to keep up to date on a regular basis. As a financial services professional, you are looking for the right information, accurate and reliable, at all times. That’s where e-Reg can make your job a lot easier.

4.1 – e-Reg a RegTech solution for your search for regulatory documentation

Our aim at easyReg is to simplify your regulatory work. We offer you a service in SaaS mode (Service as a Software) so that, thanks to our search engine, you can access the exact information you need. Whether you are a Swiss financial institution, a law firm or a consultancy, this tool is specifically designed for you.

Instead of searching through Swiss regulations and Basel Committee documents, use e-Reg to obtain not only the precise text, but also its context. It’s a real lever for your analyses and the management of your documentary needs. We also provide you with all the other regulatory information relevant to your subject. You can also consult the comments of your colleagues on these same texts.

4.2 – Search examples for Swiss capital adequacy regulations

There’s no better way to understand our Reg Tech solution than to look at a few concrete cases.

Example 1: regulatory discount

Enter the expression ‘regulatory haircut’ (Sicherheitsabschläge) in our e-Reg search engine:

 

You will be taken directly to the table of current and future regulations:

Example 2: treatment of second homes in the calculation of equity capital

Do you have any doubts about how to calculate equity capital for second homes? Proceed in the same way by entering ‘second homes’ in the e-Reg engine.

You’ll get the following information:

Example 3: Basel III regulations

Our e-Reg platform includes a ‘changes’ module. Here you will find, for example, the item ‘Basel III final’ with access to :

  • an analysis of the main impacts of these new regulations applicable in 2025 ;
  • clickable references to key sources of regulatory information ;
  • the ability to drag reference files into the tool, along with notes and comments.

This example of evolving regulations shows how important it is to have up-to-date, reliable information at all times. At easyReg, this is our business. To find out more about how our platform can help you with your document searches, arrange an online demo of our e-Reg tool.