More than just a technical update, the ESMA data quality report signals a clear direction: data quality is no longer just a compliance issue, it is becoming a strategic differentiator. Firms that treat regulatory data as a burden will be left behind. Those who treat it as capital will thrive.
Here are four key takeaways from the report and what they mean for financial institutions, compliance leaders, and data teams.
High-quality data is becoming a regulatory expectation and a competitive necessity
ESMA makes it clear that regulatory authorities now rely on granular, high-frequency data to monitor systemic risks, detect market abuse, and inform policymaking. In 2024 alone, ESMA and NCAs used MiFIR, EMIR, SFTR, and AIFMD data to supervise clearing obligations, analyse ETF trends, and benchmark cross-border market activity.
As supervisory tools become more sophisticated (and as data quality frameworks like DQEFs (Data Quality Engagement Frameworks) are adopted widely), firms must ensure their data is timely, accurate, and complete. Poor-quality data isn’t just a compliance risk anymore. It’s a reputational and strategic one.
Takeaway: firms should elevate their internal data governance, audit their regulatory submissions, and treat supervisory data as a risk-control and reputational asset.
ESMA’s push for simplification is a call to modernise internal reporting
A standout initiative in the report is ESMA’s successful proof of concept showing that MiFIR transaction data can support both transparency and volume cap calculations, enabling the decommissioning of two separate reporting systems in 2025.
This move embodies a new approach: doing more with less, through smart use of existing data. The shift offers a clear opportunity for firms to streamline reporting processes and reduce operational complexity – if they are ready to adapt.
Takeaway: forward-looking compliance teams should review overlapping reporting flows and advocate for simplification by aligning internal data architectures with emerging regulatory models.
The era of guidance is over: regulators are ready to enforce
This year’s report includes details on sanctions imposed by NCAs for data reporting failures. That’s a clear message: the shift from encouragement to enforcement has begun.
Alongside this, ESMA is deploying machine learning and advanced analytics to spot anomalies, detect rating shopping, and verify consistency across reporting frameworks. Firms can no longer afford a reactive posture. They need proactive governance and real-time validation built into their reporting pipelines.
Takeaway: embed automated controls, invest in RegTech, and ensure compliance teams have the tools to stay ahead of supervisory scrutiny.
AI and Big Data are reshaping regulatory supervision and firms must keep pace
ESMA is transforming into a data-driven, tech-enabled regulator. In 2024, it expanded access to its big data platform (EDP) and the SHARE environment, enabling over 250 analysts across Europe to perform collaborative, high-speed analytics.
It’s not just about scale, it’s about agility. Regulators are leveraging generative AI, text mining, and cross-dataset integration to support smarter, faster oversight. That shift sets the bar for financial institutions too.
Takeaway: to stay in step with regulators, firms must build AI literacy into their compliance functions and explore how emerging tools can enhance reporting, surveillance, and risk analytics.
From burden to advantage: the strategic case for better data
Regulatory data is no longer a one-way street. It is a two-way conversation. The firms that succeed in this new era will be those that view data not just as a compliance burden, but as a strategic asset: one that supports risk management, informs decision-making, and strengthens market credibility.
The ESMA report is both a warning and a roadmap. Those who ignore it may soon find themselves scrambling to catch up. But those who listen and and invest early have a unique opportunity to lead.
The report is available on ESMA’s website here. ESMA will also be holding a webinar on 15th May from 11:00 -12:00 CET.
We’ll be attending and we’d love to hear your take. Let’s connect after the webinar to share insights and explore what this means for your compliance and data strategy.
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