How banks can seize the moment with automation, data modernization

Now, a measure of regulatory clarity has materialized for sell-side institutions. Banks that have already initiated data and operational tech transformations are well-positioned to take advantage of a new environment in which data volumes will explode: trade-level data, intraday margin data, collateral movement data, and stress and exception data. Banks that have delayed transformations but amp up data infrastructure modernization now will gain the flexibility to use the same reference and investment data across risk, compliance, operations, trading, and more. They should appraise their enterprise data management systems to understand their capability to accurately capture transactions and prices, manage life cycle events, and reconcile information promptly. Then, they can identify and address data quality and management gaps. Make no mistake: Most financial institutions should be in some phase of data modernization, regardless of new capital regulations.

Banks can leverage their modernized technology platforms to improve regulatory stress testing, automate liquidity management, and practice micro-level capital discipline across portfolios. Treasury managers can then gain granular transparency into cash balances and liquidity requirements to stay flexible amid fluctuating markets and increased regulations. Expanded focus on the risk-based approach to calculating RWAs will require new models, more data, and accelerated timelines for regulatory reporting. As a result, timely access to high-quality data will be crucial for ensuring accurate RWA calculations. Naturally, the costs of compliance will increase, so banks need to ensure operational efficiencies wherever they can get it.

In terms of recapturing more mid-market and home lending credit businesses, institutions will need to leverage technology to solve data fragmentation, settlement latency, and reporting transparency issues. Their infrastructure will need to better handle the complexities of asset-backed finance (ABF) and other complex private credit structures more efficiently than the private credit sector.

Inflection points like this do not often occur, so it is critical for institutions to be ready to seize the day. On March 19, the federal bank regulatory agencies requested comment on three proposals to modernize the regulatory capital framework for banks of all sizes, setting a June 18, 2026 public comment deadline.^x