Webinar: RegTech Data series - Transforming data collection for financial institutions

15th April 2021: As part of our RegTech: Data Series, Suade Labs invited the Bank of England, the Bank of Italy and the Open Data Institute to a discussion around transforming data collection for financial institutions.

This was was centred around the Bank of England’s ‘transforming data collection plan’, designed with the aim to improve data at financial institutions and facilitate regulatory compliance processes.

Panel:

• Angus Moir, Head of Data Collection Transformation Team - Bank of England
• Orsola De Marco, Head of Innovation – the Open Data Institute
• Massimo Casa, Senior Advisor Statistics Data Collection and Processing - Banca d’Italia

Moderated by: Murat Abur, CTO – Suade Labs

Angus Moir discussed how data and analysis are at the core of the Bank of England’s decision-making process for monetary and financial stability, and that getting access to data is a crucial aspect of its work.

This kind of granular data was not accessible during the financial crisis which has sparked the drive for more data post-crisis. This increase in regulations also comes with its challenges and without technology, it is increasingly difficult and costly. Challenges that financial institutions also face include having multiple reporting processes whilst still using legacy systems combined with complex reporting rules, which stifle innovation.

Three main pillars are being looked at by the Bank of England to transform data collection:

1. Common data standards - data standards are crucial to the transformation as they identify and describe the data within the financial system
2. Modernised reporting instructions - how financial institutions can use technology to make things easier to implement, as well as simplifying instructions or removing ambiguity or reporting requirements.
3. Integrated reporting approach – the importance of end-to-end reporting integration, which will also allow for the integration of firm input data and the Bank’s reports.

Scaling complexity

Massimo Casa explained the Banca d’Italia’s approach to scaling complexity and that in the Italian reporting system, it had standardised many steps of this system, from data collection to data transmission. The Bank then introduced an input approach which looks at reporting with a 360-degree perspective and defined an attribute that is reused multiple times. He also touched upon the importance of streamlining reporting and how the ability to share results among teams within the Bank is pivotal to increasing efficiencies.

Standards

With regards to the data standards conversation, the majority opinion was that to create a ‘common’ data standard which will be used by multiple stakeholders, we must take the open and collaborative approach.

Comparing regulators’ approaches to data standards

Massimo drew on his extensive experience from developing and contributing to PUMA. PUMA is one of the first, if not the first, data standards in the financial services industry that combines Banca d'Italia's decades of experience in this space.

Questions & Answers

Q: What are your thoughts on how the BoE may be able to work together with regulators around the globe to create a Global (and not local) standard? Have you seen synergies and alignment of intent with other regulators around the Globe?

A: Angus Moir: Firstly, as we set out in our recently published transformation plan for data collection, we are keen for solutions that transform data collection to work internationally, not just in the UK. This includes aiming for international data standards, not just UK data standards. Secondly, we know there are a growing number of authorities around the world that share our desire to transform data collection and develop data standards. We want to work with those authorities with existing initiatives to develop and adopt solutions. And we want to encourage authorities to launch new initiatives in this space.

Q: Is the data collection by code, using any BoE APIs or would this be an algorithm deployed on the client side, or is this post ingestion?

A: Angus Moir: We think ‘instructions as code’ could be implemented in a number of ways, from publishing ‘pseudo-code’, with significant human intervention, through to publishing code libraries and aiming for full automation of reporting change. We need to spend more time as part of our joint work programme thinking about these issues.

Q: HMRC and other tax authorities around the world are moving to have digital collection of granular data. What is the view on this from a regulatory perspective?

A: Angus Moir: As we outlined, in our transformation plan for data collection, we think there are challenges to just collecting granular data for the PRA’s needs.

To find out more about how Suade is revolutionising regulatory reporting and driving innovation in financial services, please get in touch.