DLT Compliance Reporting

TL;DR

This paper explores how distributed ledger technology can automate compliance reporting in financial services, enabling regulators to access near real-time data and potentially transforming compliance processes.

Contribution

It introduces a novel artefact designed using DSR methodology that automates compliance data collection and proposes four implications of DLT in compliance reporting.

Findings

DLT enables automation of compliance processes.

Regulators can access data in near real-time.

Four propositions on DLT's impact on compliance.

Abstract

The IS discourse on the potential of distributed ledger technology (DLT) in the financial services has grown at a tremendous pace in recent years. Yet, little has been said about the related implications for the costly and highly regulated process of compliance reporting. Working with a group of representatives from industry and regulatory authorities, we employ the design science research methodology (DSR) in the design, development, and evaluation of an artefact, enabling the automated collection and enrichment of transactional data. Our findings indicate that DLT may facilitate the automation of key compliance processes through the implementation of a "pull-model", in which regulators can access compliance data in near real-time to stage aggregate exposures at the supranational level. Generalizing our preliminary results, we present four propositions on the implications of DLT in compliance. The findings contribute new practical insights on the topic of compliance to the growing IS discourse on DLT.