BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade. The plan considers findings from the data collection review process, which was initiated in January 2020. The report on the transformation plan sets out the issues facing parties involved in the current data collection process; outlines vision and needed reforms for the future; and lays out next steps that aim to address the identified issues. For the transformation process, PRA is looking to build a core team comprising staff from BOE, FCA, the firms from whom it collects data, and solution providers that wish to participate. PRA and FCA issued a letter to the CEOs of regulated firms to provide an update on the work done to transform data collection and to reaffirm the commitment to work in partnership with these firms to tackle the growing challenges in this area.
The review process identified three key reforms that entail defining and adopting common data standards, modernizing reporting instructions, and integrating reporting to move to a more streamlined, efficient approach to data collection. Common data standards and modernization of reporting instructions are two reforms that can transform any given report or data collection. However, to fully realize their value and tackle the complexity problems identified in this review chapter three, these two reforms should provide the basis for a more integrated data collection approach. BoE and FCA expect the transformation plan to have at least the following three phases:
- Phase one of the plan will set the foundation for future phases, will be carried out during 2021-2023, and will have three high-level aims. The first aim is to produce iterations of design prototypes and to translate these into early versions of functional solutions. The second aim is to deliver tangible change, for a limited number of use cases, thus creating value and showing stakeholders that transformation can be achieved. The third aim is to deliver intangible benefits, such as learning, key relationships, and establishing the teams and structures that will manage the program.
- Phase two will focus on scaling the transformation into new areas. The authorities will look to scale the work done in phase one and begin the process of integrating reports and data—key to the integrated reporting reform.
- Phase three will look to expand the work to more complex collections, building on the techniques that have been developed and the results already delivered. These later phases will be where the bulk of the value will be delivered.
During each phase, the aim is to deliver a series of "use cases" focusing on particular collections or types of collections. The first phase is expected to focus on making progress on the modernization of reporting instructions and the common data standards reforms, with progress on the integration of data collection to come in later phases. The selected use cases for this phase involve reforming the quarterly derivative statistics return, delivering a commercial real estate database, and optimizing the liquidity monitoring metrics tool. Alongside these core use cases, preparatory work will be done on some "high-value, high-complexity" use cases, where the potential to integrate a series of reports exists. Mortgage data reporting is one such use case. By April 2023, the phase one solution is expected to be implemented by the authorities and industry. The authorities expect to start delivery of changes for mortgage reporting and similar use cases in phase two of the transformation program.
Keywords: Europe, UK, Banking, Insurance, Securities, Data Collection, Reporting, Statistical Reporting, Integrated Reporting Framework, PRA, BoE, FCA
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting