Five steps to DRR Implementation

ISDA’s Digital Regulatory Reporting (DRR) has emerged as a powerful solution for financial institutions grappling with complex global trade reporting requirements.

Since BNP Paribas' successful implementation in 2022, adoption has accelerated, with JP Morgan going live in 2014 and JPX planning to do so later this year.

For organisations considering a DRR implementation, the following five-step approach offers a strategic pathway to success. 

1. Love the problem, not the solution 

A successful DRR implementation starts with the right positioning; it must be relevant and impactful in resolving specific business challenges.  

While DRR broadly addresses regulatory reporting inefficiencies, organisations must focus on their own pain points to achieve meaningful ROI. These may include reporting inaccuracies, the complexity of mapping from different source systems, audit difficulties, or excessive maintenance costs.  

Do: Start building the DRR business case by identifying your organisation's single biggest trade reporting challenge and quantify it in terms of time or money. 

Don't: Push DRR internally without a clear business case or just because "everyone else is doing it". 

2. Get in the community-driven compliance loop 

DRR's unique value proposition lies in collaboration. Instead of each institution individually interpreting regulations, market participants collectively develop a standardised interpretation under ISDA's governance.  

This collaboration eliminates variations in compliance quality in a non-competitive area between firms, while ensuring adherence to industry best practices. The community therefore provides a resource multiplier for firms that consider using DRR. 

Do: Get familiar with the DRR project, its scope, principles, and limitations. Join relevant industry working groups and talk to peers who have built successful solutions. 

Don't: Start promoting DRR to stakeholders without a clear understanding of what it can and cannot do for you. 

3. Think big, act local 

DRR can not only streamline regulatory reporting, but it also potentially offers additional strategic benefits. Because it leverages the Common Domain Model (CDM, a standardised data model for the processing of financial transactions through their lifecycle), firms implementing DRR also normalise their trade data representation.  

However, a successful implementation requires balancing long-term vision with practical, manageable steps. Firms should leverage the divisibility of trade reporting (by asset class, product type, reporting jurisdiction, or even by reportable attributes) to start with a clearly defined minimum viable product (MVP). 

Do: Identify the minimum perimeter on which your organisation can extract value, then "land and expand". 

Don't: Sell the dream about rolling out DRR globally across all asset classes and jurisdictions too early without a credible proof point. 

4. Move fast and test things 

Rapidly evolving regulations demand operational agility. Small, focused teams working on specific deliverables can achieve quicker results than large teams tackling broadly defined goals.  

Fast-paced projects maintain stakeholder engagement, build trust through quick wins, and accelerate decision-making. Deploying the solution in shorter cycles facilitate alignment across the multiple departments involved in the reporting process. 

Do: Measure your DRR delivery plan in weeks and ideally align it with an internal or external deadline, like an upcoming reporting change's compliance date. 

Don't: Include DRR into a transformation programme measured in years, where value only starts to be realised at the back end. 

5. Buy to build 

While DRR consists of open-source code libraries, organisations are still responsible for implementing, testing, and deploying this code within their existing infrastructure. 

Implementation also requires developing CDM mappings for data integration and quickly discovering and recovering from production issues. A successful approach relies on being able to customise, test and deploy their own implementation of DRR – something which can be accelerated using the right tools. 

Do: Consider your future interaction with DRR as open-source software. Think about the control, speed and transparency you'll require once it's in production. 

Don't: Move from experimentation to production without an established strategy for ongoing maintenance. 

How REGnosys can help with your implementation

We offer a structured four-step onboarding programme designed to address these considerations efficiently. Within weeks, participants become proficient with CDM and DRR, refine their MVP scope, deliver a functional proof-of-concept, develop their open-source strategy, and build their internal business case.  

Following this initial phase, organisations can proceed to implementation, delivering a production-ready MVP in under three months. 

This comprehensive approach has been honed through several successful go-live deliveries. It enables you to leverage DRR's mutualisation benefits while maintaining focus on your business-specific challenges. By starting small, moving quickly, and building strategically, you will transform your organisation’s regulatory reporting operating model while positioning it for further CDM-based innovations.