The Financial Conduct Authority (FCA) and the Bank of England (BoE) have revealed new plans to develop their data and analytics capabilities.

Both authorities depend on access to high-quality data to maintain monetary and financial stability, market integrity, effective competition and consumer protection.

The FCA’s refreshed strategy has outlined the regulator’s increased focus on the use of advanced analytics and automation techniques to strengthen its understanding of the way markets function and allow the FCA to predict, monitor and respond to firm and market issues.

Alongside investment in new technology and an increased use of external data, the FCA announced it will pursue a broader transformation, to improve its understanding of using data and innovative technology.

FCA executive director of strategy and competition, Christopher Woolard, said: “Advances in technology are changing the nature of the firms and markets we regulate. Our Data Strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change.

“In keeping with our mission, a data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively.”

The BoE has published a new discussion paper – Transforming data collection from the UK financial sector – which it said will improve the timeliness and effectiveness of data collection from firms across the financial system.

The discussion paper has set out the issues facing the current data collection system, identifying and exploring a series of potential solutions.

Prudential Regulation Authority CEO, Sam Woods, added: “Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively.

“Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for firms.

“This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade – our discussion paper starts that process by setting out the strategic issues in order to stimulate a debate about the way forward.”

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