On 7th January, the Bank of England published a discussion paper on ‘Transforming data collection from the UK financial sector’. The paper seeks to encourage solutions to make data collection significantly more efficient for firms while at the same time improving the Bank’s ability to use collected data more effectively. Our response represented a mix of our views and the ones we have collated from our clients and the industry. Below provides a summary of Suade’s response:
Suade are very supportive of the Bank of England’s vision and goals to improve data collection and believe the benefits to the industry and regulators could be immense if effectively carried out. In our opinion, the most important aspect of an enhanced data collection process is the definition of a standardised/common data input. We consider it the most important for the following reasons:
It is clear from Suade’s experience that a common data standard, when published, should be truly open-source, reference well-defined legal definitions and standards (e.g. ISO), and follow modern developer best practices.
The Bank should disclose to the market, as soon as practically possible, any information it can about the design, vision, and data modelling approach it intends to use for defining a common data input. This will avoid jeopardising or delaying any current data harmonisation or data quality projects firms are undertaking with additional uncertainty. Once defined, a common data input can serve as the foundation for exploring some of the more radical proposals the Bank has made in the Discussion Paper, such as the ‘pull’ model.
The Bank should also extrapolate from the work behind the only open-source data format for regulatory reporting, FIRE. FIRE takes definitions directly from financial regulation to ensure that data attributes are kept to a minimum and universal, while pointing to the relevant legislative paragraphs. Exploring an open-source approach would enable the Bank to reduce duplication of work in regulatory reporting among financial institutions. These institutions could, instead, focus on ensuring that the common data inputs comprehensively cover financial regulation.
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
2) Modernise reporting instructions
3) Update architecture and governance
You can read the full paper discussion from the Bank of England here
Our Breakfast Briefing series has been hugely successful, with experts from various backgrounds delivering valuable insights on the most topical matters in financial regulation. The series began with a number of briefings covering the ‘Dear CEO’ letter. Throughout these meetings, we systematically drilled-down into three key points and how Suade’s solution aligns with them:
We also discussed the driving forces behind the letter, as well as how banks should respond. With help from our panel, Suade suggested several ideas to ensure that trust remains high in the banks’ regulatory processes:
“This is a new frontier of regulatory efficiency and effectiveness.” – Mark Carney
During the Bank of England Governor’s Mansion House speech, Mark Carney, addressed the benefits of new technologies in the regulatory space. New technologies like Suade have already reduced the costs of analysis, storage and regulatory submissions. He stated that “this is a new frontier of regulatory efficiency and effectiveness”. These are exactly the foundations and vision that Suade is built upon! Read the full speech here.