The Financial Conduct Authority (FCA) and the Bank of England (Bank) have proposed reforms to develop their data and analytics functions in the financial industry.

The initiative is aimed at protecting consumers while supporting financial stability and competition.

In its Data Strategy plan, the FCA outlined its intention to gain better insights on the market function utilising advanced analytics and automation.

This is said to facilitate prediction and monitoring of issues in the market. The plan by FCA also includes development of data science units.

Pursuing a similar goal, the Bank of England released a Discussion Paper (DP), which aims to increase the effectiveness and timeliness of data collection in the financial sector.

Furthermore, the FCA, the Bank of England along with seven regulated firms have collaborated to release a Viability Assessment report on the latest Digital Regulatory Reporting (DRR) pilot.

DRR will enable firms to supply data requested by the regulators automatically. This is said to lower collection costs.

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.”