Stop treating regulatory reporting like a fire drill

JUN. 12, 2025

4 Min Read

Lumenalta

Banks can shift regulatory reporting from a frantic burden into a source of insight and business advantage. A strong data foundation ensures that compliance stops being just a cost center and becomes a strategic asset that informs decision-making.

Today, regulators demand more detail and speed, yet the industry spends enormous sums on compliance (U.S. banks spent about $70 billion on regulatory compliance in 2023) with little to show beyond checked boxes. The root problem is that no amount of automation or AI can help if the underlying data is siloed and inconsistent; there is truly no AI in compliance without good data. When critical information lives in scattered spreadsheets and unintegrated systems, even basic reporting turns into a last-minute scramble.

“Banks can shift regulatory reporting from a frantic burden into a source of insight and business advantage.”

Key takeaways

1. Fragmented systems and manual spreadsheets keep banks stuck in reactive, “fire-drill” compliance mode, wasting time and risking errors
2. Without high-quality, unified data, even the best compliance technology or AI will produce poor results – there’s no AI magic without a solid data foundation.
3. Modernizing the data architecture (centralizing data and automating workflows) makes regulatory reporting efficient, consistent, and far less labor-intensive.
4. Proactive compliance processes turn mandatory reports into a source of insight, allowing banks to forecast risks and trends instead of just meeting deadlines.
5. Banks that invest in data governance and reporting automation transform compliance from a costly obligation into a strategic advantage that improves decision-making.

Siloed data keeps regulatory reporting in constant fire-drill mode

Regulatory reporting in many banks still functions like an emergency response rather than a controlled operation. Each deadline initiates a surge of activity, not because of the complexity of regulations, but due to the outdated systems and disconnected data sources banks continue to rely on. The absence of a unified, trusted data foundation turns routine tasks into inefficient exercises that absorb resources and strain staff.

Scattered data sources: Financial data is scattered across systems, turning report preparation into a tedious hunt for information and causing time-consuming reconciliations.
Manual work and spreadsheets: Overreliance on spreadsheets causes errors and version confusion; 60% of GRC users still manage compliance this way, virtually guaranteeing last-minute overtime.
Last-minute scrambling: Lacking up-to-date, centralized data, each new regulation or report request triggers a “fire drill” as staff cobble together information at the eleventh hour.
High risk of errors: A heavily manual, inconsistent process raises the chance of mistakes or omissions.
Costly consequences: Even minor reporting errors can trigger revisions, damage credibility, or incur penalties.

The cumulative impact is more than just missed efficiencies; it’s diminished confidence across compliance, operations, and leadership. When teams are constantly reacting, there’s no room for foresight, process improvement, or risk anticipation. Instead of serving as a tool for governance and insight, regulatory reporting becomes a recurring disruption that slows the business and exposes it to preventable risks.

There is no AI in compliance without a foundation of good data

Many banks are turning to automation and advanced analytics to ease the compliance burden. However, even the most sophisticated tools are useless if the underlying data is poor. Without clean, well-governed information, those efforts will falter.

Building a foundation of good data starts with centralizing and standardizing information. Banks also need strong data governance to assign responsibility and maintain data quality. When data is audit-ready, regulators can trust the reports, and internal teams can trust the analytics built on that data.

Quality data is also a prerequisite for any predictive compliance or risk modeling. An algorithm is only as reliable as its inputs, so feeding incomplete or inconsistent data into compliance AI yields misleading results. Conversely, when data is accurate, up-to-date, and easily accessible, automation can effectively flag anomalies, aggregate exposures, and generate reports without manual intervention. In short, modern compliance initiatives (from real-time monitoring to Basel III analytics) all hinge on a solid data foundation.

Modern data architecture turns regulatory compliance into a strategic asset

A modern data architecture allows banks to move compliance from an obligation to an opportunity, and industry surveys reflect this shift (70% of compliance professionals say their organizations now approach compliance more strategically). Rebuilding how data is collected, stored, and used can significantly reduce the pain of reporting and unlock new business value. Key elements of this modern approach span four areas.

Centralized and audit-ready data

A modern compliance data architecture consolidates information from many legacy systems into a single source of truth. This centralized hub is fully audit-ready; every data point is traceable to its origin and subject to strict quality controls. Because all needed information is verified in one place, cross-departmental data chasing is eliminated, and reports are generated much faster, with greater confidence that everyone is drawing from the same vetted data.

Automated reporting workflows

With clean, centralized data, banks can automate much of the regulatory reporting workflow by using advanced platforms to pull required data into reports on a set schedule. Automated validations catch missing fields or outlier values early, resulting in far fewer human hours spent on error-prone number crunching. Improving data quality and process automation can cut the preparation time for regulatory reports nearly in half. Removing manual bottlenecks means compliance reporting becomes a routine process rather than a heroic effort.

Real-time monitoring and analytics

Modern data architecture supports continuous compliance monitoring, so instead of waiting for periodic filings, teams track key indicators in real time via dashboards. For example, capital ratios, liquidity measures, and credit exposures can be calculated daily from the unified data store. This practice ensures the bank stays within regulatory bounds while also giving leadership an up-to-the-minute view of its health. Analyzing trends in these data means management can make proactive adjustments well before any threshold is breached. Compliance data (once used only for external filings) now informs business strategy on an ongoing basis.

Using compliance data for business insights

When regulatory data is well-managed, it can serve purposes beyond compliance by feeding into internal business intelligence. For instance, liquidity reports might highlight underutilized cash that could be better invested, or credit exposure data might reveal a brewing concentration risk. High-quality compliance data also leads to more accurate forecasts; for example, better data governance has improved loan default prediction accuracy by up to 20%.

“Turning ‘fire drills’ into forecasts means the bank stays a few steps ahead, meeting regulatory expectations with less fuss and guiding strategy with the same data.”

Proactive compliance turns regulatory reporting into a forecasting advantage

Banks that shift from reactive data gathering to proactive data management can turn regulatory compliance into a competitive advantage. Rather than treating each report as an isolated task, these organizations make compliance a continuous process, producing actionable intelligence. With data organized for easy retrieval and analysis, regulatory reporting becomes a byproduct of day-to-day operations and also serves as a window into the future.

A proactive compliance approach continuously collects and validates data in near real time, even allowing teams to simulate the impact of new regulations or economic scenarios on the fly. For example, if regulators propose a new capital requirement, the bank can quickly model how that change would affect its balance sheet. This foresight lets leadership plan and adapt well before regulatory deadlines.

When compliance data is continuously analyzed for patterns (for example, early warning signs in credit portfolios or regional market shifts), the organization can respond faster than competitors and drive smarter decisions. Turning “fire drills” into forecasts means the bank stays a few steps ahead, meeting regulatory expectations with less fuss and guiding strategy with the same data.

Lumenalta helps build the data foundation for proactive compliance

Lumenalta partners with banking IT leaders to modernize data architecture and automate compliance workflows in line with a “no AI without good data” approach, making the forecasting advantages of proactive compliance a reality. In practice, this means establishing a centralized, audit-ready data hub and integrating tools that continuously collect and reconcile regulatory data, eliminating the chaos of last-minute scrambles and providing a reliable pipeline of accurate information.

Our team focuses on delivering measurable outcomes quickly. We collaborate with CIOs and CTOs to deploy cloud-native data platforms and reporting automation that begin showing value in weeks, not years. With better-governed data and intelligent processes in place, banks can trust their compliance reports and reuse that information for forecasting and analytics. The result is a compliance function that not only meets regulators’ expectations efficiently but also provides leadership with insights. With a modern data foundation, regulatory compliance shifts from a check-the-box necessity to a strategic advantage for the business.

Table of contents

Siloed data keeps regulatory reporting in constant fire-drill mode
There is no AI in compliance without a foundation of good data
Modern data architecture turns regulatory compliance into a strategic asset
Proactive compliance turns regulatory reporting into a forecasting advantage
Lumenalta helps build the data foundation for proactive compliance
Common questions

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