Streamlining transaction reporting with automation tools

In today’s post-Brexit regulatory environment, UK financial firms face mounting pressure to navigate increasingly complex and divergent compliance requirements. Transaction reporting has rapidly evolved as FCA expectations tighten and reforms like EMIR Refit (both UK and EU iterations) introduce more granular reporting standards. It has moved from a routine obligation into a critical, high-stakes function requiring speed, precision, and flexibility.

For years, firms have leaned on manual processes, pulling trade data from fragmented systems, manually reconciling discrepancies, and relying on stretched compliance teams to meet submission deadlines. That approach may have worked in the past, but now, it’s a liability.

As reporting volumes rise and regulators demand greater transparency, the cost of errors—both financial and reputational—continues to grow. Manual workflows simply can’t keep up, and varying degrees of transaction reporting automation are now the only workable answer.

Automation tools offer a more innovative, strategic means of navigating current and future markets. Automation allows firms to reduce risk, lower operational burden, and adapt swiftly to regulatory changes by streamlining data consolidation, enforcing real-time validation, and building audit-ready workflows.

Transaction reporting has become a pressure point for UK firms, and it’s crucial to understand how automation can relieve that strain and what to consider when selecting the right platform. If your current compliance process feels stretched to breaking point, this may be the transformation you didn’t know you needed.

The ever-changing regulatory landscape

While looking into transaction reporting and automation tools, those operating in the broader financial services industry will be well aware of regulatory and operational changes.

Post-Brexit divergence

Initially, post-Brexit, the UK and EU authorities maintained a high degree of regulatory harmony. In recent times, however, we have seen ongoing divergence in areas such as Markets in Financial Instruments Regulation (MiFIR) transaction reporting. While some MiFIR differences appear minor, they’ve led to persistent dual-reporting burdens. This has prompted renewed debate among UK asset managers on whether buy-side firms should remain subject to both UK and EU regimes.

EMIR Refit implications

As of 30 September 2024, when EMIR Refit came into effect in the UK, the number of reportable data fields increased from 129 to over 200. Firms are now obliged to share unique trade identifiers (UTIs), which is proving challenging for areas such as non-cleared derivative markets. Stricter validation rules also mean that European and UK regulators are working to a zero-tolerance approach to validation breaches. Where companies fail format or logic checks, reports will be rejected outright, highlighting the urgent need for robust transaction reporting automation.

FCA expectations

There is greater pressure on firms to enhance automation, with the Market Watch 81 review identifying widespread issues with overly manual transaction reporting processes. Previously, the regulators were content with a reactive approach to breaches. This has changed dramatically, with firms now expected to self-identify breaches, conduct root cause analysis, and benchmark themselves against peers. Discussion papers, such as DP24/2, are being used by the FCA to encourage firms to adopt more modern data standards and leverage RegTech.

Challenges of manual transaction reporting

As transaction reporting requirements continue to intensify and volumes continue to increase, a number of challenges have grown increasingly common, many of which the regulators have identified as specific areas of interest.

Operational burden

The FCA requires data from a range of sources for transaction reporting which have become more fragmented over the years. They include execution management systems, order management systems, market data feeds, internal chat platforms, and voice calls. Reconstructing transaction reports from fragmented sources is both labour-intensive and error-prone, especially when deadlines tighten and volumes spike. Without transaction reporting automation, it is near-impossible to reconcile data fields, verify timestamps, collate numerous data sources, and ensure consistency in regulator reports.

Mid-sized firms are struggling

Consolidation of the UK financial services industry is ongoing, with many mid-sized firms struggling to update their in-house reporting tools to modern standards. As competitors look to introduce the latest RegTech systems, those with limited resources fall further behind. For example, a mid-size broker using manual processes may fail to detect even the slightest imperfection in timestamp data. This can lead to a systemic reporting error, potentially affecting hundreds of trades and triggering intervention by the FCA or other regulators.

Audit weakness

While self-reporting breaches this critical part of the regulatory playbook, many firms are struggling to collate the information required for regular audits. As a result of manual reporting and limited traceability, firms are struggling to demonstrate the accuracy of their data, source consistency, and amendment history. Even false-flag regulatory reviews can take days, removing valuable resources from everyday business activity.

Ultimately, the risk of non-compliance and the inability to quickly verify past reports and changes enhance the likelihood of financial penalties, supervisory notices, and, ultimately, reputational issues.

Identifying the broad challenges of manual reporting compared to cutting-edge Regtech automation is not difficult. Still, only when you look below the surface do you see the breadth of issues. As new asset classes and regulatory instructions are added to the mix, the need to embrace and incorporate RegTech reporting has never been stronger.

How automation tools solve transaction reporting pain points

We take much of the automation in transaction reporting for granted, but we are just scratching the surface in many ways. There are emerging systems which directly address the various transaction reporting pain points, creating a more stable framework and more efficient workflows.

Centralised data integration

One of the most significant challenges is pulling together data across disparate systems and converting it into a standardised format in real time (or near real-time). These systems can automatically cross-reference trades with individual voice calls or email trails, creating a single source of truth. The centralisation of reporting inputs ensures consistency across data fields, significantly reducing submission rejections.

Accuracy and timeliness

Modern-day transaction reporting automation systems are not only accurate and extremely quick, but they can also carry out pre-submission validations. This effectively identifies potential issues before they are reported to the regulator using AI and conditional logic, reducing false positives and wasted resources. As the regulatory reports are generated and validated automatically, firms can meet FCA deadlines even in high-volume, volatile trading environments.

Audit trails and transparency

The greater the level of automation, the stronger the audit trail and transparency of the source data. The ability to timestamp and log every stage, such as data ingestion, field mapping, validation, corrections and submissions, creates the ultimate audit trail. This means firms can now be “audit-ready” for regular or open expected FCA or internal audits.

Dynamic regulatory updates

Focusing on the operational and reporting efficiencies created by Regtech is easy, but it’s also essential to recognise the dynamic approach to regulatory updates. Central cloud-based platforms can now push regulatory changes directly to clients without the involvement of internal IT specialists. This reduces potential downtime and compliance risks during historic transition periods.

Real-world impact: Benefits for UK financial firms

The natural temptation is to focus on the financial benefits of streamlining compliance using transaction reporting automation tools. However, many additional benefits exist, which create an even greater cumulative benefit in the longer term.

Operational efficiency

There are significant benefits to automating previously manual-intensive actions. Time spent preparing and collating data, validating reports, and delivering to the regulator, which previously took hours or even days, can now be completed in a matter of minutes.

Practical tools such as scheduled batch submissions, real-time error reports, and centralised dashboard views are empowering compliance teams across the industry.

Risk reduction

Ultimately, enhanced regulations all have one endgame: reducing market risk and protecting investors. There are huge accuracy gains with automation, allowing pre-report checks to be carried out and identifying potential red flags before the regulator reports are submitted. The ability to produce more accurate reports means that firms are less likely to be targeted by the FCA with reviews or investigations. Along with fuelling a stronger relationship between industry and regulators, it also helps to avoid potentially catastrophic damage to reputation and credibility.

Scalability

Gone are the days when systems had to undergo major upgrades to accommodate long-term growth. Instead, they are replaced by scalable systems in line with business development. This also allows firms to take on additional business without the proportional increase in headcount. We have also seen enhanced multijurisdictional flexibility, allowing companies to look beyond their traditional markets with confidence, with Regtech systems that automatically accommodate variations in reporting data and reports.

Cost savings

Last but not least, many companies which have switched to automated transaction reporting have seen significant cost savings in areas such as:

• Reduced manual workload
• Lower remediation costs
• simplified infrastructure

Looking at this from a broader perspective, this has given many firms the flexibility to redirect resources to benefit the business in the long term.

Choosing the right automation platform

Not all automation platforms are created equal in a market crowded with Regtech promises. Selecting the right transaction reporting solution isn’t just about ticking regulatory boxes; it’s also about choosing a partner that can evolve with your business, scale with your trading volume, and keep you confidently ahead of compliance demands.

Don’t be afraid to interrogate your vendor

Can their platform adapt to future regulatory changes without disruptive redeployment? Do they offer seamless onboarding, training, and long-term support? Are the validation, reconciliation, and exception management tools built-in or bolted on?

This is where eflow sets itself apart. With a proprietary, platform-based architecture, our transaction reporting solution deploys fast and updates universally, avoiding costly re-coding. Our dynamic parameters automatically adjust thresholds based on market context, such as trade volume or asset class. As a UK-regulated firm, our team understands the nuances of local compliance and delivers service accordingly - no call centre scripts, just real expertise.

If you’re looking for a smarter, faster, and future-proof way to handle transaction reporting, eflow isn’t just an option; it’s the edge.

Conclusion

The regulatory landscape for UK financial firms isn’t just shifting, it’s moving at pace and accelerating. With rising complexity under EMIR Refit, UK MiFIR divergence, and the FCA’s sharpened focus on data quality, transaction reporting has become a proving ground for compliance credibility.

Legacy workflows now expose firms to mounting resource pressure, missed reporting thresholds, and regulatory scrutiny that can erode credibility and trust. The time for patchwork solutions is over.

Automation is no longer a “nice to have;” it’s the foundation of modern, resilient compliance. Done correctly, it not only meets the letter of the law but can also unlock real efficiency, sharper oversight, and peace of mind.

If your current transaction reporting process feels like it’s lagging, now is the time to assess, adapt, and advance. eflow’s platform-based, UK-specific transaction reporting automation solution offers the scale, speed, and support to meet today’s and tomorrow’s growing demands.

Don’t wait for an inevitable breach to be the wake-up call - start the conversation now.