The FCA says it plans to become a 'data-driven regulator', investing in new technology and skills to mine and exploit high-quality, granular data sources. The approach includes data science units being established in selected parts of the organisation and exploitation of new opportunities arising from the FCA's migration to cloud-based IT infrastructure.

Christopher Woolard, executive director of strategy and competition at the FCA, says: "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. 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.'

At the Bank of England, the focus is on improving the timeliness and effectiveness of data collection from firms across the financial system. It has published a discussion paper, which sets out the issues facing the current data collection system and identifies and explores a series of potential solutions.

Sam Woods, deputy governor for prudential regulation and CEO of the Prudential Regulation Authority, says: "Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively. Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for firms. This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade."

One implication of the shift will be a requirement for firms to automatically supply data in digital format to the regulatory bodies. To this end, the FCA and the BofE have committed to exploring joint work on the creation of common data standards and to undertake a review of the legal implications of writing reporting instructions as code.