BoE Issues Update on Ongoing Data Transformation Program
The Bank of England (BoE) issued a communication to firms to provide an update on the progress of the joint data transformation program—which is being led by BoE, the Financial Conduct Authority (FCA), and the industry—for the financial sector in UK. The regulator also announced that the start of phase two of the joint transformation program is being pushed back until September 2022. The selected phase two use cases are Commercial Real Estate (CRE) data; Retail Banking Business Model data; Incident, Outsourcing, and Third Party reporting; strategic review of prudential data collections from solo regulated firms; and asset reporting for insurers.
The communication on joint data transformation program highlights the publication of a letter from the CEOs of Prudential Regulation Authority (PRA) and FCA, Sam Woods and Nikhil Rathi, respectively. The letter outlines the achievements and progress of the data transformation program in its first year and what is needed from industry to continue the work to transform data collection. The letter accompanies the publication of the first set of recommendations for data collection changes:
- BoE should enhance the statistical reporting and Financial Derivatives return (Form DQ) reporting landing pages with new functionality to improve the user experience. The general look and feel should remain the same, so users are not thrown off by major changes.
- BoE (and FCA where stated) should restructure reporting instructions and data definitions for Form DQ to make it easier to complete reporting; review Form DQ requirements and make them more prescriptive; and produce standardized reference tables, improve data definitions, increase adoption of data standards in instructions and work towards standardized datasets with instructions in the form code.
- BoE (and FCA where stated) should modernize instructions to standardize and simplify classification of counterparties for Form DQ; and adopt unique identifiers to index counterparties in their publicly available reference data and encourage other public organizations to do the same. BoE should also extend the modernized instructions to other statistical and future reporting requirements; develop an automated counterparty classification tool; and engage internationally to promote standardization of the System of National Account categorization.
- FCA should deliver a single FCA regulatory portal for online firm interactions to increase efficiency for all FCA regulated firms. This should start with producing a business case to secure funding for initial changes in 2023-24; and investigate options for a single data collection portal across BoE and FCA.
- FCA should implement a visualization to reflect firm data back to firms with market context, ensure it protects the confidentiality of firms in delivering this change; extend to other numerical data collections and future reporting, and investigate further capability, including supervisory flags and providing feedback on non-numerical collections.
- FCA should implement the redesigned shorter survey into RegData without material changes, end the ad-hoc survey, and implement the improved data collection steps into the business as usual process.
- FCA should implement a more intuitive data collection form design to improve the data submission journey; extend this solution to other data collections and future reporting; and develop a pipeline of form design improvements and a process for delivering them.
In their response, BoE and FCA agreed to accept all of the recommendations of the industry committees in principle. For some recommendations, BoE and FCA are keen to move to delivery of solutions immediately. For other recommendations, the joint transformation program will need to explore the solutions further to understand how they might be delivered and the associated business case. Specifically, in response to the recommendations, BoE and FCA are taking a number of data collection initiatives forward, including:
- delivering a more intuitive form design across regulatory returns that will make data submission simpler, faster, and more valuable—forms will include hints and tips to improve data collection accuracy
- implementing a new landing page and set of reporting instructions for Form DQ to make it easier for firms to understand their requirements and which data to provide
- exploring the concept of a unified data collection portal for regulated firms to interact with regulators
Related Links
- Communication on Transformation Program
- Letter from Sam Woods and Nikhil Rathi
- Phase One Recommendations and Response
Keywords: Europe, UK, Banking, Securities, Data Collection, Reporting, Form DQ, Data Transformation, Regtech, Statistical Reporting, Digital Regulatory Reporting, PRA, FCA, BoE
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