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Regulating Authorities act as Service Providers

posted Feb 8, 2015, 2:19 AM by Web Master   [ updated Feb 22, 2015, 8:44 AM ]
A number of regulators try to offer a helping hand to small and medium sized businesses (SME). They do this because the want to receive digital reports or exchange digital messages that they can automatically process leading to cost reduction, which is fine. For this reason they all embrace XML based document standards, like XBRL or other, as a flexible reporting language and go through a lot of effort to define report definitions, like an XBRL taxonomy, that can be used to format the reports the right way. So far so good. But then they take the next step and develop reporting or message exchange software for the SME or,  even further, develop an exchange platform or reporting portal.

So they find themselves way out of their professional regulatory disciplines, and in the middle of IT business. Now they themselves become competitors in the IT regulatory reporting market fields. Of course they are not starting an IT division that is developing, maintaining and managing the software and the platforms. This work is outsourced right away, but paid for with regulatory budget. And because they always want to be in charge they arrive at hiring small IT companies that next to that will be heavily depending on the regulatory budget.

Now we are there. In this situation there will be no independent decision making, nor will there be enough knowledge and experience to "do it first time right". So eventually the reuse ability will be poor, standardization will be low and cost will be high. The demands of the SME will have received too little attention, needed flexibility will be insufficient, support will be insufficient and SME reporting cost will rise and rise. Think again!