Kaizen Reporting – Planet Compliance RegTech Interview (2021)

Let’s start with a brief introduction, what can you tell us about Kaizen Reporting and your RegTech offering?  

Kaizen Reporting are a team of regulatory and data specialists on a mission to transform the quality of regulatory reporting in the financial services industry.  Founded by former regulator Dario Crispini, Kaizen’s multi-award winning ReportShield Quality Assurance Services check the accuracy, completeness and timeliness of reported data for regimes such as MiFIR, EMIR, SFTR, Dodd-Frank and other G20 regulations.

What sets our services apart is that we check all reported data, not just samples of data, so firms get a true picture of their reporting quality.  Delivered as an automated managed service, ReportShield gives firms the ability to evidence where their reporting is right or wrong, and fulfil their regulatory obligations.

More recently Kaizen launched a global Shareholding Disclosure Service for the automated monitoring and reporting of the 400+ rules and requirements for long and short disclosures, takeover regimes, sensitive industries, issuer requests and research disclosures.  The service can be tailored to your business and includes a safe and secure, easy-to-use platform alongside regulatory expertise and guidance.

Kaizen also recently launched Single Rulebook, a new easy-to -use software solution that enables you to search, share and manage regulatory rules on one digital platform. 

What are some of the biggest challenges your solutions you solve for your clients?

Quite simply, we exist to help our clients meet their regulatory obligations and manage their regulatory risks.  Regulatory reporting exists for regulators to monitor for market abuse and systemic risk so it’s incredibly important to get right. Unfortunately due to a variety of reasons, one of which is the huge complexity of the reporting regimes, firms continually struggle to get their reporting accurate, complete and timely – we help firms do just that and provide them with the evidence they need to stay on the right side of the regulator.

Could you give us a use case of why a client came to you and how they are using your solution to solve their particular challenge? 

The challenge

A Tier 1 investment bank operating a complex trading book came under scrutiny after the UK regulator, the Financial Conduct Authority (FCA), identified issues with its transaction reporting. Following several reviews by other providers over nine months, the FCA raised concerns that the issues it had originally identified were still not resolved and the risk of a fine was high.

How we helped

Kaizen was appointed to provide ongoing quality assurance of the firm’s transaction reports with its ReportShield™ Accuracy Testing and Advanced Regulatory Reconciliation services. Kaizen’s all-encompassing testing approach is tailored to each firm. Independent checking means that all regulatory decisions are stress tested against Kaizen’s own understanding of the regulations.

Within one month, Kaizen had completed testing on all reported trades and transactions. For the first time, the client was able to:

• Quantify the scale of reporting errors and have full visibility of its reporting quality

• Evaluate the amount of over-reporting and duplicate reporting

• Identify the amount of under-reporting.

A full risk assessment was provided, outlining all identified issues as well as extensive management information. With the roll-out of the reconciliation services across all primary trading systems, full transparency has been achieved for the firm’s reporting from a front-to-back perspective. As with all firms, the review required tailoring of the testing across multiple trading platforms.

The outcome

The firm’s senior management now have full transparency of all reporting issues and have a high level of confidence in their ability to manage their reporting effectively and to address any identified problems. The FCA’s confidence in the bank’s controls over its reporting has been rebuilt.

How would you describe the differences between your offering from others in your RegTech category?

Regulatory expertise – we aren’t just a technology firm.  We hire genuine experts and people who’ve been in the shoes of our clients and embed this expertise into our services.

  • Our Shareholding Disclosure Service isn’t just a one-size fits all platform – it’s been built by people who’ve worked in shareholding disclosure compliance for many years and this expertise is provided alongside the platform to ensure it is fit for each individual business’s needs.
  • Our ReportShield Assurance Services combine the knowledge of our regulatory specialists, some of whom are former regulators, with the latest in data programming.

Comprehensiveness of testing – we are the only firm that is able to offer firms a full picture of the quality of their reported data.  This means Kaizen clients can prove where their reporting is correct and identify where it is wrong – something the regulators expect.

We solve the ‘valid but wrong’ problem – Validations provided by Approved Reporting Mechanisms (ARMs) and Trade Repositories typically pick up only 3% of reporting errors.  Kaizen’s ReportShield provides 100% coverage.  

Due to the global pandemic a lot has changed in the world in the last year. How has your company changed in the in the last 12 months?

We’ve changed a lot!  First of all, our staff numbers have doubled in size as has our client base. We have adapted to the new working environment while continuing to offer our clients the best services and solutions to help them with their regulatory obligations.

Secondly, we’ve broadened our scope with the acquisition of two different companies providing two unique services. 

  • Our Shareholding Disclosure Service provides an automated platform for compliance teams to accurately report and monitor their long and short disclosure, takeover reporting, sensitive industries, issuer requests and more.

  • Our new Single Rulebook platform is our new integrated software solution that enables you to search, share and manage regulatory rules on one digital platform.

Thirdly, our ReportShield Assurance Services have been enhanced and expanded to cover more jurisdictions to ensure we help clients the world over with the accuracy of their reporting.

What is drives you as company & what is Kaizen Reporting’s long term vision?

When our CEO Dario Crispini first started Kaizen, he wanted to solve the problem of incorrect regulatory reporting – this mission continues to drive us today.  We want to make life easier for our clients and help them sleep easier at night.  Better quality data also helps regulators more easily identify market abuse and systemic risk.

In the past year, Kaizen’s scope has broadened beyond regulatory reporting assurance with the launch of new software services such as our Shareholding Disclosure Service, which simplifies the monitoring and reporting of the 400+ shareholding disclosure rules and requirements.  With our Single Rulebook digital platform, Kaizen is pioneering the digitisation of compliance and regulation.

Kaizen is a Japanese term for ‘good change’ and we continually work to iterate and improve our services.  We believe we are never the finished product – so watch this space!

What are some of the important developments you are seeing in the RegTech industry?

  • Consolidation – we are likely to see more M&A activity in the coming years as start-ups get to a certain maturity and get bought by larger players in the market.
  • Improved products – due to ongoing funding and interest in Regtech and access to capital by Regtech firms, new offerings are emerging and existing providers are able to invest more in their products.
  • Knowledge management – as technology improves, we will see more services that will enable better knowledge management in firms. When staff move to new roles, a lot of specifics go with that person – tools such as Single Rulebook that help create a ‘house view’ of regulation will be a game changer for firms.  

What’s the best way for potential clients or investors to get in touch with you?

We’d love to hear from you. For more information about Kaizen Reporting or to speak to one of our regulatory specialists you can contact us at enquiries@kaizenreporting.com or on +44 (0) 207 205 4090 or visit us at www.kaizenreporting.com.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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