'Transforming data collection from the UK financial sector'
In January 2020, the Bank of England published a discussion paper to encourage potential solutions to make data collection significantly more efficient for firms while at the same time improving the BoE’s ability to use what they do collect more effectively. In summary, they committed themselves to the development of a “world-class regtech and data strategy". They have also appreciated the need for this to be “an inclusive exercise, which looks across the full range of firms and collections”.
This paper (along with the FCA's initiative) supports Suade’s mission to bring regulation into the digital age through harmonisation and standardisation of data. Reformation of traditional regulatory reporting processes and systems is vital to achieve this, and the following points are the key areas in which the regulators are looking to make digital supervision a reality:
1) Standardised data inputs
- Development of a common data format - Reduce the heterogeneity of firms’ data, decreasing the cost and time to implement new requirements
- Update and standardise industry data standards - Alignment of firms’ and authorities’ regulatory comprehension
2) Modernise reporting instructions
- Technology-driven standardisation of language in the creation of reporting instructions - Easy-to-interpret and consistent instructions
- Early industry engagement in the design of new instructions - Allows for a more iterative process with a greater understanding of both firms’ authorities’ data use
- Instructions published as code and natural language - Streamlined and automated implementation with a high level of consistency
3) Update architecture and governance
- Move from Push to Pull architecture - Allows authorities to take reports directly from firms' APIs. This gives greater flexibility and reduces cost of requests
- Collection of granular data instead of just reports - Reduces the need for firms to construct reports and creates greater transparency for authorities
You can read the full paper discussion from the Bank of England here