Strong and simple in 2026. What SDDTs should do before 31 March 2026.

The PRA’s Strong and Simple framework sits at the heart of the UK’s Smarter Regulatory Framework and is now final for Small Domestic Deposit Takers (SDDTs). It aims to make prudential requirements more proportionate for smaller, domestically focused banks, while preserving resilience.​

The simplified capital regime for SDDTs takes effect on 1 January 2027, alongside Basel 3.1 implementation for other firms, via PS1/26 and PS4/26. The more immediate milestone is 31 March 2026: firms must notify the PRA if they intend to enter the SDDT regime, otherwise they will fall under Basel 3.1 from 1 January 2027.

Who should pay attention – and why data matters

Any UK‑focused bank with total assets below £20 billion, limited trading activity and a domestic exposure profile should be assessing SDDT eligibility. But this is no longer just a policy question; it is a data and architecture question.

Eligibility depends on how exposures, assets and activities are measured and evidenced in your systems, not just in policy papers. Mid‑tier firms may even consider restructuring legal entities or product sets to qualify, which in turn drives changes to reporting hierarchies, data models and controls.

What changes for reporting and technology teams

Strong and Simple delivers genuine simplification, but not a free pass.

• The PRA is de‑scoping SDDTs from a large number of capital and market risk templates and has simplified or removed some CCR, CVA and Pillar 2 returns, significantly reducing the volume of regulatory forms for in‑scope firms.​
• Liquidity and disclosure requirements have already been simplified, and further reporting changes will apply from 2027 for SDDTs, with fewer templates and streamlined instructions.

For reporting, data and technology teams, this translates into three main design questions:

• Can your architecture switch regime cleanly (Basel 3.1 vs SDDT) without manual workarounds in spreadsheets?
• Do data models explicitly tag exposures, portfolios and entities in ways that support SDDT eligibility tests and ongoing monitoring?
• Are controls, lineage and validation rules embedded in systems rather than relying on end‑user judgement at quarter‑end?

A RegTech‑enabled approach makes these regime choices configurable instead of one‑off tactical projects.

What SDDTs should do in Q1 2026

Treat Q1 2026 as a short, focused change programme rather than an administrative notification exercise.

1. Confirm eligibility – in your data, not just in a slide deck
   • Build or refine eligibility dashboards showing asset size, geographical focus, trading activity and use of internal models, using the same data you use for regulatory returns.​
   • Document calculations and thresholds, with clear lineage back to source systems, so you can evidence your position to the PRA and internal audit.
2. Map reporting changes and design the target architecture
   • Identify which templates disappear, which are simplified and which remain if you opt into SDDT, including capital, liquidity, market risk and Pillar 2 reporting.
   • Use this to drive a target-state reporting architecture: fewer templates should mean fewer tactical mappings, fewer manual adjustments and more automation.
   • Where you are upgrading platforms, cloud infrastructure or data warehouses in 2026, align Strong and Simple changes into the same roadmap.
3. Embed governance, ownership and assurance
   • Even with simplification, the PRA expects high‑quality, timely data and strong assurance over risk‑weighted assets and Pillar 2 rebasing.​
   • Clarify ownership for regime selection, eligibility monitoring and SDDT‑specific templates, and ensure your controls framework (reconciliations, validations, sign‑offs) is embedded in your systems rather than bolted on.
   • For SDDT firms, prepare for the PRA’s separate data collection exercise on capital, ensuring your data quality and model documentation can support this.​

Why acting early helps – especially if you’re modernising

The notification deadline is fixed at 31 March 2026, and boards will want a clear, data‑driven recommendation well before that date. Leaving eligibility, systems impact assessments and assurance planning until March pushes decision‑making into the same window as other quarter‑end activity.

Acting early lets you:

• Align SDDT decisions with ongoing reporting, cloud or data‑platform programmes, avoiding duplicated effort.
• Bake Strong and Simple into your data model once, then configure reporting for either SDDT or Basel 3.1 as needed.
• Demonstrate to supervisors that your choice of regime is grounded in robust data, clear governance and sustainable automation rather than short‑term tactical fixes.

For firms looking to turn Strong and Simple into a catalyst for better reporting, this is an opportunity to move away from spreadsheet‑driven change and towards a more resilient, configurable RegTech stack.

How a RegTech partner can help

A specialist RegTech platform can help SDDTs and Basel 3.1 firms to:

• Parameterise eligibility rules and regime logic, so changes in policy or thresholds can be implemented centrally rather than re‑coded in multiple reports.
• Automate template population, adjustments and validation for both SDDT and Basel 3.1 returns, reducing operational risk and manual effort.​
• Provide data lineage, auditability and scenario analysis to support ICAAP and board decisions on regime choice and capital impacts.

If you want support translating Strong and Simple eligibility into practical reporting and data changes, and aligning it with your 2026 technology roadmap, register to attend our upcoming roundtable.