Context
On 23 February 2021, the Bank of England published ‘Transforming Data Collection from the UK Financial Sector: A Plan for 2021 and beyond’. The document is the Bank’s plan to transform its ability to collect data over the next decade, and its response to deal with the strains that are currently put on the data collection process, and on the suppliers of data within the financial sector.
The Bank, and the two Regulators, are proposing a work programme that delivers on three critical areas of reform:
- Integrating reporting – increasing consistency in designing and delivering collections for value, re-use and efficiency.
- Modernising reporting instructions – rethinking the way reporting requirements are designed and expressed and improving the ease with which they can be interpreted and implemented by firms.
- Defining and adopting common data standards – standardising how financial data is described, defined and sourced at an operational level within firms.
Key projects have helped the Bank to identify the challenges for both regulators and firms in achieving the vision of reform, and the Bank summarised these challenges with three key questions:
1. How can the Bank ensure that its data collections are worthwhile and valuable exercises for regulators and industry to invest in?
2. How can the industry best understand and interpret the Bank’s reporting instructions so that high quality data is provided?
3. How can the Bank and the industry remove legacy data, process and technology siloes and streamline the reporting process?
As a result, the PRA and FCA have sent a joint communication to CEOs providing an update on the work being done around data collection and asking firms to work with them in partnership to tackle growing challenges. The letter states “We recognise that reporting is one of the most demanding parts of regulation. At the same time, the quality of data we have received has not always been to the standards we expect, and our data needs have evolved as technology and business models have changed.”
Next actions
None – for information.