learn/boe

Suade's vision comes to light

Suade Breakfast Briefing Series

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:

  • Data Quality
  • Governance and transparency
  • Detail of interpretation

We also discussed the driving forces behind the letter, as well as how banks should respond. With help from our panel, Suade suggested a number of ideas to implement to ensure confidence remains in the banks’ regulatory processes. Methods of self-assessment, crowd-sourced calculations and data harmonisation were among the strong concepts brought forward through these events.

Survey Response

We have already began collating our client thoughts on this and have some great ideas on how we can assist in driving digital supervision forward. Please see below of our survey response as well as some points we have actioned:

1) Anonymous online discussion forum:

  • It would be great to provide a platform to share issues and offer support and guidance. It will benefit smaller firms that don’t have as many people internally from varied backgrounds to fully debate issues at hand
  • As we had an overwhelming positive response to this, Suade is exploring ways to set an anonymous forum to discuss regulatory issues

2) Regular, collaborative working groups:

  • It is always good to hear from different people in the industry and promote active discussion on a wide range of topics from regulatory changes to technological advancements. It seems that quarterly meetings away from reporting quarter ends would be preferable, with firms being able to submit ideas for discussion would be of use
  • Suade will be starting quarterly regulatory forums, if there are any issues that you would like to cover in the next working group please don’t hesitate to reach out

3) Assistance with Tech Governance, Deep Dives, S166:

  • Regulators are expecting greater explain-ability from firms with regards to their regulatory reporting. This is easy using the Suade solution as it is built with transparency and traceability at its core but otherwise this can be difficult for firms to achieve. With regards to governance, this can be highly dependent on the size of the institution, for larger institutions there are sometimes processes already in place internally or with regular advisors

4) Feedback to regulators (Collated & Anonymised):

  • This would be a useful way to get clarification on rule interpretation and new reporting requirements especially when common issues have been identified. Also, as the regulators regularly release discussion papers, we can collate feedback from firms via forums and working groups and relay these back to the regulators

5) Ideas for new features e.g. dashboards, analytics:

  • Utilising the vast regulatory reporting data to offer forward-looking and predictive insights. Additionally, the ability to create custom reports, e.g. extending Suade functionality to internal management risk reporting. Then it would be possible to provide reconciliation between external and internal reporting

6) Anything else that would make your work easier or prevent a S166:

  • Increased collaboration and openness seem to be the most favourable route for this, how that is delivered can vary depending on the firm's preferences
  • The quarterly working groups and anonymous online forum are the initial ideas that have been put forward, but we welcome any other ideas that you believe would benefit the industry

Bank of England’s discussion paper on ‘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

Mansion House Speech

“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.