1. Involvement from Project Inception:

In many projects, legal reporting is an afterthought, leading to inefficiencies and post-closure headaches. By involving the legal reporting team early in the project phase, we pave the way for seamless integration and a more comprehensive understanding of compliance requirements.

2. Stream Leads as Legal Reporting Champions:

Stream leads play a pivotal role in project phases, overseeing specific operational and accounting flows. Understanding legal reporting is not just a responsibility for the dedicated legal reporting team but a necessity for stream leads. We discuss the benefits of stream leads having a solid grasp of legal reporting requirements, enabling them to make informed decisions throughout the project. You cannot manage the securities module if you don’t know EMIR, MIFIR/TAF, TPTIBS layout. You cannot be a payment stream lead without knowing CDDP, BOP layout.

3. Data Management for Success:

Building legal reporting on the right foundation is crucial. We explore the importance of using general ledger and accounting tables as much as possible, steering clear of the pitfalls of relying on operational tables. This strategic decision not only simplifies post-closing operations but also ensures accurate reporting. There is data to be taken from the operation table (like interest rate…), or reporting that must be done on a transactional table (BOP, CDDP, ALMM…) but the core should come from the general ledger.

4. Dynamic Coding for Adaptability:

The landscape of legal reporting is dynamic, with frequent changes in fields and reporting structures. We discuss the importance of parameterizable  code and robust documentation, empowering teams to adapt to these changes without extensive coding efforts. This can reduce drastically the testing time.

It will also make the change management easier, as parametrization items could be seen as “standard change” (ITIL concept) and easier to promote to higher environment.

5. Efficiency through Business Intelligence:

With large datasets, the speed of legal reporting is paramount. We advocate for utilizing business intelligence tools to build and test legal reports efficiently. This approach not only expedites testing processes but also enhances the overall testing experience. If producing a file from your core banking takes 5H, testing becomes a nightmare as it takes a day of work to do a simple test.

6. Avoid Reconciliation Between Tools:

When legal reporting is poorly coded, and transactional tables are favored over accounting tables, it often leads to the need for reconciliation between legal reporting tools and the core banking system. This scenario must be avoided at all costs.

7. Unified Management for Streamlined Decision-Making:

Legal reporting often involves multiple units, leading to decision-making challenges. We explore the benefits of consolidating responsibilities under a unified management approach, reducing complexity and improving efficiency. Often, four or more teams are involved (especially if a refresh is requested): Accounting team, Business intelligence team, Core banking team, Testing team, infra team. It is sometimes better to externalize a person that can cover the 3/4 area together (leaving the testing to the bank) than trying to work internally with 5 different teams.

8. Strategic Prioritization:

The sheer volume of legal reporting tasks can be overwhelming. We propose a strategic approach to prioritize tasks, balancing automation and manual efforts. This ensures that workload remains manageable, and meaningful results are delivered.

9. Promote Post-Closing Functionality to Remove Environment Refresh Needs

Often, legal reporting cannot be generated from production, and a refresh is requested at the end of the month to be able to run the legal reporting and post-closing task. Following the six above recommendations should make it feasible to implement a strong post-closing process in production. This would remove the need to refresh every month production to a lower environment for legal reporting purposes.

10. Choose the right software

Last but not least, the selected software must incorporate an efficient logging system for each error. The responsible person should have access to the SQL database to extract logs in an efficient manner, or alternatively, have access to flat files. Incoherent logs can make it challenging to address all validation errors generated by your legal reporting tool for your employees.

Conclusion:

In conclusion, navigating the challenges of legal reporting requires a strategic and proactive approach. By involving key teams from the project’s inception, leveraging the right data management practices, implementing dynamic coding, utilizing business intelligence tools, unifying management, and strategically prioritizing tasks, financial institutions can transform legal reporting from a potential nightmare into a streamlined, efficient process.