Financial services firms are gearing up to file annual reports electronically from the beginning of next year.
From 1 April 2005, insurers and mortgage brokers will be required to submit annual reports electronically to financial watchdog the Financial Services Authority (FSA).
All 32,000 companies covered by the FSA will have to file reports in this way by 2007.
Firms will be given the option to file reports via the FSA's secure website or using its Integrated Regulatory Return (IRR) system, which exchanges data using the Extensible Business Reporting Language (XBRL) standard.
"Electronic reporting will improve efficiency for everyone involved. Firms already hold much of the information in their own systems, making the reports easy to automate," said an FSA spokesman.
But some companies have expressed fears over the security of the IRR system, and its ability to cope with a large number of users.
A report by the FSA outlining feedback it received from the industry noted: "Some respondents outlined concerns over poor performance of systems, for instance the inability to submit returns during peak periods.
"A clear concern raised by many respondents was the security of the information to be submitted."
The FSA is working closely with software experts to ensure that its systems will be robust enough to deal effectively with commercially sensitive data.
The FSA expects to publish its authentication and messaging plans shortly.
IT industry group Intellect has committed to working with the FSA to promote the adoption of XBRL, ensuring that back-office systems will be compliant.
"There is a critical need to establish a common understanding of the XBRL technical standards among the independent software vendor community," said Chris Wood, chairman of Intellect's financial services group.
"Intellect is dedicated to working with the FSA and the Software Supplies Advisory Panel to ensure that this happens."
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