Liv Watson from Workiva presented on regulatory technology (RegTech) and how it can help organizations more efficiently and effectively meet growing regulatory reporting demands. Some key points included: - Regulatory requirements have increased in complexity and volume, outpacing human capabilities without technology. RegTech aims to address this through automation. - RegTech tools and strategies span areas like compliance management, regulatory reporting, risk management, and "smart audits". Emerging areas include blockchain, data standards like XBRL, and predictive analytics. - Adopting a flexible data architecture with single-source and multiple-version data models can help organizations better leverage RegTech across functions like finance, risk, and ESG reporting.

1. The Programmable Regulated Eco-System
Presented By:
Liv Apneseth Watson
Sr. Director of Strategic Customer Initiatives
Workiva Inc. (NYSE: WK)

2. What If the US Regulatory
Burden Were Its Own Country?
Source: http://regdata.org/what-if-the-us-regulatory-burden-were-its-own-country/

3. The costs of compliance keeps
growing, while its complexity
has started to out-pace human
understanding.
SEC
COSO
ERM
Statutory Reporting
Corporate Acct/Fin
Business Unit Fin
FP&A/ Strategic Planning
Policies & Procedures Doc Sign
off
EHS & Sustainability
Investor Relations
BCBS239
The ramifications
of failing to satisfy
the reporting
demands of
regulators are
serious: financial
penalties,
unwanted press
coverage,
operating under
the cloud of an
MRIA (Matter
Requiring
Immediate
Attention), even
suspension of
business.

4. Source: https://www.workiva.com/uk/resources/future-financial-reporting-survey-2017
The Future of Financial Reporting Survey 2017

5. What is Your
RegTech Strategy ?

6. Case Management Tools
RegTech Sectors?
What
is
RegTech
?
Legislation / Regulation Gap Analysis Tools
Compliance Universe Tools
Management Information Tools
Health Check Tools
Transaction Reporting Tools
Regulatory Reporting Tools
Activity Monitoring Tools
Training Tools
Risk Data Warehouses
Predictive Analytics Tools
Digital ID Verification Tools
Audit Analytics Tools
Continous Auditing
Blockchain and Distributed Ledgers
ICOs (“initial coin offerings)
Single-Source-of-Truth (SSOT)
Flexible Data and Information Architecture
Multiple-Version-of-the-Truth (MVOT)
Machine-Learning Algorithms
Rules-Based Codes
Automating Rules for Validating Data
Intelligent Apps
Smart Assets and Smart Contracts
Learning Algorithms
XBRL

7. Xxx-Tech
• FinTech
• RegTech
• RegData
• RiskTech
• InsurTech
• XxxTech...

8. RegTech
Increasingly difficult to provide what the regulators want

9. • < 50 % of the an organization's structured data is actively
used in making decisions.
• < 1 % of its unstructured data is analyzed or used at all.
• > 70 % of employee has access to data they should not.
• > 80 % of analysts time is spent simply discovering and
preparing data.
SSOTs to MVOTs Architecture
Key Enhancements
• Increased Data Governance
• Version Control
• Decreased Time to Report
• Sustainable/Repeatable
• Automate Manual
Redundancies
• Detailed Analytical Review
• True Collaborative Process
• No Unintended Changes
• Audit Trail
Key Challenges
• Local validation rules
• Different taxonomies
• Different data formats

10. Reimagine Data Architecture with RegTech
A Flexible Data and Information Architecture
Single-Source-of-Truth
SSOTs
Multiple-Version-of-the-Truth
MVOTs
(1) Any possible linkages to SOOTs data element are by reference only in the MVOTs.
(2) Updates to the data element in the SOOTs location propagate to the entire system without the possibility of a duplicate value
somewhere being forgotten no matter what formatting.

11. Multiple Internal Information Systems
Cloud Based Collaborative
Work Management Platform
EBA Data
Point Model(s)
(DPM)
MVOTs
SOOTs
CRD IV
Source system data entry processes and reference data are often inconsistent across systems.
Prudential Regulators
Risk-Based Reporting
NOTE: Gradually replacing
form-based reporting with
data cubes
EBA Data
Point Model(s)
(DPM)
Industry Sector: Banking
Basel III / EU-CRD IV
Reporting Requirements
Common Reporting (COREP)
Financial Reporting (FINREP)
Industry Sector: Insurance
Solvency II Reporting Requirements
National Supervisory Authorities
EIOPA/ UK PRAEBA/ UK FCA
HMRC
Company
House
Approved
information
distribution
firms
Disclosure and
Transparency
Rules, Listing
Rules or
Prospectus
Rules
National Storage
Mechanism
Ofcom
There is a growing emphasis on the consequences
of failing to comply with regulations
Pillar 1:
Quantitative
requirements
including risk-based
capital requirements
Pillar 2:
(ORSA)
Pillar 3:
Public Solvency and Financial
Condition Report (SFCR) and a
private Regulatory
Supervisory Report (RSR).
Civil Aviation
Authority
Water
Industry
Commission
for Scotland
Financial
Conduct
Authority,
Payment
Systems
Regulators
OfgemOfWat
Single Source Regulations
Office (SSRO)
Office of Rail
and Road
Utility
Regulations
Defra ONS
ESMA / UK UKLA
Security Market Regulators
Statutory Reporting
Financial Ombudsman Service
Pillar I
Capital + Risk Coverage
+ Containing leverage
Pillar 2
Risk management
and supervision
Pillar 3
Market
discipline
(OSCA)
Bank of England
Statistical Collection Application
(OSCA)
A web based application that
allows users to manually key
in data or upload XML
England RegTech Ecosystem Vizor Software (based in
Ireland).
Aguilonius
Tagetik (Wolter Kluwer)
Corefiling
Invoke
Bearingpoint
Lombard Risk

12. FRS 101
FRS 102
UK IFRS
Monthly
Quarterly
Executive Flash Reports
Variance Analysis
Sales/Operations Reports
Consolidated B/U Reports
Quarterly Reporting
Packages
Forecast
Management Reporting
Earnings Presentation
Call Script (CEO/CFO)
FAQ Book
Board Presentations
Road Show Presentation
Industry/Peer Analysis
Front Line B/U Reports
War Room Reports
KPI Reports
Sales/Marketing Per BU
Costs Vs Actual
Manufacturing/Variance
Total Cost of Quality
Reports
Quarter Comparisons
working capital analysis
Variance
Finance
Risk Assessments (Self)
RCM
Process Narratives
Test of Controls
Evidence Collection
Deficiency Tracking
Audit Committee Report
COSO Mapping
Certifications
Dashboard
1, 3, 5 Year Plans
Budget to Actual
KPI Reports
"What If" Scenarios
Flash Reports
Monthly/Quarterly
Packages
Annual Operating Plan
FP&A/Strategic Planning
Risk Heat Map
Risk Pillars
Dashboard
Risk Assessments
Key Risk Indicators
Risk Escalations
10-K
10-Q
20-F
40-F
6-K
8-K
XBRL / iXBRL
S-1
S-4
Proxy
SEC
Trade partner incentives/
allowances tracking
Promotional tracking/
MAP adjustments
(minimum advertising
price),
Daily flash reports,
Forecasting/trending of
sales,
Allowances, etc.
Plug & play ROI tools,
Playbooks,
Price adjustments
Sales Analysis
• Revenue by product
• Revenue by customer
• Customer rankings
• Target attainment
• Market share
Inventory type reports:
• Inventory turnover,
• Average days in
inventory,
• Write off/write down,
• Days to sell inventory,
• Damage/returns,
• Inventory analysis
Headcount
Manufacturing production
Downtime
Inventory
Quality reporting
Warranty reporting
Materials reporting
Commodities reporting
Procurement / sourcing
reporting
Vendor management
Transfer costing
Cost to serve
Cost Finance
EHS Audit
DJSI
Sustainability Reporting
Integrated Reporting
SEC Footnotes
• Quarterly "Packages"
• Annual "Packages"
MD&A text and numerical
collection
Sustainability reports aka
factbook
Surveys
Management reports
• Budget updates
• Cost allocation
Project time tracking
Top Risks Survey
SLED Annual or quarterly
reports
EHS incident reporting
Data Collection Types
SSOT to MVOTs
Statutory Reporting
Investor Relations COSO ERM Commercial Finance Misc. Finance EHS/Sustainability Build your own

13. Reporting with SSOT to MVOTs

15. Smart Structured Data
Automating rules for validating data
XBRL Element Composition
Standard label Base properties
Calculations
References

16. Chapter 9, Information Technology,
Co-authored by Liv Watson
Contextual Reporting

17. SEC XBRL Implementation Approaches
Benefits Challenges
1
2
3
Outsourcing
(printers, consultants , vendor to prepare reports)
Bolt-on
(tools to transform the report into XBRL at the last stage of the process)
Integrated RegTech Process
(XBRL is built into the company's reporting process)
EGDAR
EGDAR
EGDAR
# High risks
# Medium XBRL
knowledge
# Pencil down
# Manual work
#Error prone
# No benefits outside for the
process
# Medium risks
# Medium XBRL
knowledge
# Low risks
# Automation
#High data quality
# Cost savings
# Pencil down
# Manual work
# Error prone
# No benefits outside for the
process
# Upfront investment
NOTE: Legal liability for your XBRL filing can’t be outsourced

18. FASB ACCOUNTING STANDARDS CODIFICATIONTMTM
• The single digital source of authoritative
nongovernmental U.S. Generally Accepted Accounting
Principles (GAAP)
• A 5-year project involving more than 200 people
Three primary goals in developing the Codification:
1.Simplify user access by codifying all authoritative US
GAAP in one spot.
2.Ensure that the codified content accurately represented
authoritative US GAAP as of July 1, 2009.
3.Create a codification research system that is up to date for
the released results of standard-setting activity.
Note: Vendors can integrate this data into product offerings
+ The 2017 US GAAP Financial
Reporting Taxonomy and
Taxonomy Disclosure Templates
In the past publications, including standards, interpretations, position statements, and opinions, had been
published in a relatively uncoordinated manner.

19. • Legislation / regulation gap
analysis tools
• Compliance universe tools
• Health check tools
• Management information tools
• Transaction reporting tools
(bitcoin)
• Regulatory business reporting
tools
• Activity monitoring tools
• Training tools
• Risk data warehouses
• Case management tools
Emerging RegTech Tools

20. What is Your
FinTech Strategy ?
"A ‘technologically enabled financial innovation that could result in new business models, applications, processes or
products with an associated material effect on financial markets and institutions and the provision of financial
services and has the potential to transform further the provision of financial products and services."
-------- EBA, 2017

21. BlockchainA Distributed Ledger Technology
+
XBRLA Global Standard for Exchanging Business
Information.

22. BlockChain + XBRL
FinTech
Aims to compete with traditional financial
methods in the delivery of financial services.
RegTech
Aims to address regulatory compliance challenges through
technological innovation.
• The integration of blockchain and XBRL provides a seamless data solution, with blockchain as a
potential output from XBRL based reporting.
• Blockchain’s smart contracts and smart assets might be facilitated by XBRL’s powerful, persistent data
model.
• General Data Protection Regulation (GDPR) might be an issue for the use of Distributed Ledger
Technologies).

23. Smart Contracts, Blockchain & Data Standards
• A token is a digital representation of an asset
which could be debt, equity, cash or a physical
asset (i.e. a vehicle or a piece of artwork).
• The blockchain is a digital distributed ledger
that records and facilitates transactions.
◦ Tokens, which are representational units of
an asset, provide the mapping of an account
to an asset and maintain a record of
ownership. They are used on a blockchain to
assign ownership and rights of underlying
assets that are transacted through smart
contracts (digital contractual agreements)
on the blockchain.
XBRL US and ConsenSys are developing a blockchain token standard
Those wishing to participate can contact Michelle Savage at XBRL US.
Creating a standard method to tokenize
transacted assets is necessary to communicate
ownership and value. Without standardization,
the speed, accuracy and automation promised
by smart contracts on the blockchain,

24. A Note About
"Smart Contracts"

25. Smart constructs are neither
“smart”, nor are they contracts in
a legal sense unless they are
bound by a separate, real-world
legal framework.
Smart contracts are business
rules encoded in software; they
are as good as the person or team
devising the rules and the
developer(s) turning those rules
into code.
“Smart Contracts” is in Many Ways Misleading

26. Smart Audits

27. Audit 4.0
Auditing is also adapting to the new RegTech Environment
Audit 4.0 will significantly change the
auditing profession by automating current
procedures, enlarging their scope,
shortening timing, and eventually improve
the overall assurance quality.
Source: http://aaajournals.org/doi/pdf/10.2308/jeta-10494
Audit Data Standards

28. CAR Lab
ASSURANCE
OF REPORTS
ASSURANCE OF
KEY PROCESSES
ASSURANCE OF
DATA
ELEMENTS
THE ENVOLVING AUDIT FRAMEWORK
Rutgers and AICPA Unveil Data Analytics Research Initiative Published December 16, 2015
New York (December 16, 2015) – Rutgers Business School and the American Institute of
CPAs (AICPA) today announced the formation of the Rutgers AICPA Data Analytics Research
Initiative (“the Initiative”). The Initiative, cosponsored by the AICPA and CPA Canada, will facilitate
the further integration of data analytics into the audit process, and demonstrate through research
how this can lead to advancements in the public accounting profession.

29. The Digital Transformation of Currencies

30. Name Description
Dentacoin Aims to improve dental care worldwide and make it affordable by utilizing the blockchain.
PotCoin
An ultra-secure digital crypto-currency, network, and banking solution for the $100B
global legal marijuana industry.
BitCoen The world's first kosher crypto currency.
PutinClassic (PUTIC) A digital souvenir. Digital versions of this coin are made unique by use of the blockchain.
KarmaCoin
Aim to make it the primary digital currency for rewarding good deeds and spreading good
karma.
Whoppercoin
Burger King Russia released 1 billion Whoppercoins using Waves, a cryptocurrency
platform. You get one every time you buy a Whopper.
"The Internet of Money" - Initial Coin Offering, (ICO)

31. Key Takeaways
•New RegTech technologies are transforming traditional business reporting
processes
•Reg Tech is a Broad Category
•The adoption of RegTech cloud based technology will provide operational
efficiencies and cost benefits when applied to current compliance and risk
management practices. RegTech solutions, coupled with enterprise-wide data
governance, risk and control platforms, allow controls and risk frameworks to
be linked seamlessly RegTech solutions are aimed at providing a more
automated, cost-effective way of meeting compliance and regulatory
reporting needs.

32. Policy and Market Trends

33. EU - Task Force on Financial Technology
Three Objectives
• To ensure that all policy work across the board is informed by and
takes account of technological innovation
• To assess whether existing rules and policies are fit for purpose in
the digital age
• To identify actions and proposals that could harness the potential
opportunities FinTech offers while also addressing the possible
risks.

34. European Commission Supports a Blockchain RegTech Pilot
Seek to improve its institutional knowledge through the pilot
Plan to "build and animate a platform for the European blockchain community

35. •Authorization and "sandboxing" regimes
•Focus on the prudential risks for credit institutions, payment institutions and electronic money
institutions
•The impact of FinTech on the business models of these institutions
•Consumer protection and retail conduct of business issues
•The impact of FinTech on the resolution of financial firms
•The impact of FinTech on anti-money laundering and countering the financing of terrorism.
EBA’s approach to financial technology (FinTech)
Source: www.eba.europa.eu/documents/10180/1919160/EBA+Discussion+Paper+on+Fintech+%28EBA-DP-2017-02%29.pdf
EBA is investigating the impact FinTech is having on the financial system and its regulation and supervision.

36. Executive Order 13771 stands out for altering the way executive branch
agencies create regulations. Known as the “2-for-1” rule, it requires agencies to
offset the costs of a new rule by modifying or eliminating at least two existing
rules.
US Regulatory Reform initiatives
Source: https://www.mercatus.org/commentary/long-road-regulatory-reform

37. Source: TODE’2017

38. RegTech Research Paper 2018
THE ASK!

39. Thank You!
Liv Watson Sr. Director of Strategic Customer Initiatives
Workiva Inc. (NYSE: WK)
2900 University Blvd Ames, IA 50010
Phone: + 1515 203 5532
Email: liv.watson@workiva.com
Skype: livwatson