Banking
Machine readable regulation (MRR) is the process of converting regulatory text into a structured format that can be easily understood and processed by machines. In layman terms – When an over speeding vehicle is flouting the traffic rules, government administered CCTV automatically captures an image and sends a speeding ticket to the concerned person. This is done through MRR. The regulations are understood by the camera and then accordingly acted upon. MRR therefore plays a vital role in implementation & compliance of regulatory actions. It provides significant advantages to both regulators and regulated entities.
In the past, businesses, especially in the banking sector, have faced considerable challenges in complying with numerous regulations. Any change in existing regulation or bringing a new regulation puts an enormous regulatory burden on the companies. The conventional approach involved laborious manual paperwork and time-consuming form filling, resulting in inefficiencies and added complexity. For example, India’s Central Bank, the Reserve Bank of India (RBI), mandates the entity bank to file approximately 700 forms for regulatory compliance. However, the advent of MRR will revolutionize this landscape by automating and simplifying compliance procedures.
MRR – the way forward
Faster implementation and ready adaptation of MRR will result in multiple opportunities for regulators and entity companies to capitalize. Initially there will be an additional cost in issuing MRR in public domain for the regulator. But the cost will come down with respect to overall cost needed for compliance adherence. Regulators can ensure that entities are not committing any misinterpretation errors whereas entities such as banks, insurers, auditors, can refrain themselves from making any error of judgment. MRR will also improve the quality of compliance. With MRR, faster and cost-effective regulation updates can be executed at various departments across multiple verticals, without committing mistakes.
