The Australian Prudential Regulation Authority (APRA) published a discussion paper that outlines its changing approach to data collection and the five-year data collection implementation roadmap, with the comment period ending on June 24, 2022.
APRA notes that, as the importance of data in decision-making increases, it has begun transforming how it collects data from over 2,000 entities it regulates. APRA has outlined plans to collect richer data through APRA Connect, its new data collection system. By 2027, APRA expects to have all collections on APRA Connect and be in a position to decommission Direct to APRA (D2A), its current data collection system. The first two years of each roadmap is well-defined, while the data collections outlined for implementation 2024 onward still require further development (and have indicative timeline). The design and implementation of the comprehensive banking data collections will be phased, to manage the pace of change for industry. Collections for the next five years are outlined below:
- An interim capital collection, the timeline for which is 2023—APRA will create an interim collection to evaluate compliance with revised capital requirements, while allowing time for a comprehensive credit collection to be developed.
- A comprehensive credit collection, the timeline for which spans 2024 to 2027—This will ultimately include data covered by the interim capital collection and enhance a number of other existing credit risk and statistical collections (including loan characteristics, collateral, and customer demographics).
- A comprehensive liabilities collection, the timeline for which again spans 2024 to 2027—This collection covers liquidity (2025), Financial Claims Scheme, and statistical reporting/EFS (2027).
- Several simpler, smaller collections—These focus on areas such as market risk (2024), interest rate risk in the banking book (2025), and financial statements (2026). These collections are expected to
be relatively limited because the value of more detailed data is not commensurate with
the cost involved in collecting it.
- Cross-industry data collections—the Remuneration and Financial Accountability Regime (FAR) collections are well-progressed. Subject to legislation, they are expected to go live in APRA Connect in 2023. Climate change financial risks data collection is also expected to go live in 2023
One of the key aspects on which APRA is seeking feedback is the implementation timeline outlined in the roadmap. APRA notes that, to prepare for the transition, regulated entities may wish to review and enhance their data quality assurance practices and accountabilities (ideally in consultation with auditors), given the move toward greater transparency. They may also wish to ensure that their regulatory reporting function is resourced to manage the sequence of new collections over the next few years and to explore opportunities to promote automation and use regtech (for example, use of machine-to-machine transmission methods).
Keywords: Asia Pacific, Australia, Banking, Basel, Reporting, APRA Connect, Statistical Reporting, Credit Risk, Market Risk, IRRBB, Regulatory Capital, Climate Change Risk, ESG, APRA, Headline
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