Marcus Evans and BearingPoint: 6th Edition Risk Data Aggregation and Reporting Conference
Estimated Reading Time: 8 minutes
At the Hilton Canary Wharf in London, the 6th Edition Risk Data Aggregation and Reporting Conference took place over 24th to 26th April 2017. With Gold Sponsorship from BearingPoint, the conference brought together delegates from banks, regulators and RegTech providers from across Europe to discuss the BCBS 239 regulatory project.
Over recent years, Marcus Evans and BearingPoint have developed a strong working relationship through multiple successful collaborations that have produced invaluable insights for our clients.
From delivering reliably engaging talks and valuable workshops at various Marcus Evans conferences, to working with our Global Webinars team to produce timely thought leadership content that is engaged with by registrants from across the globe, we have been fortunate to work with BearingPoint so closely over recent years.
We were therefore delighted to partner with BearingPoint once again for the 6th Data Reporting and Risk Data Conference, where they were able to share their experiences in implementing data and IT architectures with their G-SIB clients, helping them to fulfill their journeys to becoming BCBS 239 compliant.
Being the only conference event available that focuses specifically on BCBS 239 in great detail, this year’s Risk Data Aggregation and Reporting Conference provided our banking delegates with a unique opportunity to convene directly with the regulators who are responsible for monitoring their BCBS 239 compliance and to put their questions to them.
The G-SIBs have been implementing BCBS 239 in to their risk data management for some time now. However many have missed their deadlines and are unclear as to what the consequences of this are for them, the value proposition of this conference for G-SIBs therefore was the opportunity to get clear advice directly from regulators and industry peers on how best to create risk data architectures that are compliant with BCBS 239.
Many D-SIBs on the other hand are now being told that they will need to become compliant with BCBS 239 within the next 3 years. For them, the conference provided a much-needed platform to gauge expectations from the regulators and to also learn from the experiences of the G-SIBs.
Delegates in attendance included representatives from Standard Chartered, Royal Bank of Scotland, Bank of England, Bank of Italy, Santander, HSBC, Cognizant, UBS and the EDM Council.
Day One
Following an introductory discussion on BCBS 239 from the regulators, we were pleased to have Maciej Piechocki (Partner at BearingPoint) take the stage to outline the work that BearingPoint have been doing to help G-SIB banks over the last few years to honour their compliance obligations to BCBS 239.
Maciej covered some of the regulatory trends that are currently being seen across the wider risk reporting landscape, of which BCBS 239 is just one part. For example, the steady substitution of rule-based reporting solutions to more ad-hoc reporting solutions is, for Maciej, an industry trend that already aligns directly with Principle 2 of the regulation:
BCBS 239, Principle 2: “ A bank should design, build and maintain data architecture and IT infrastructure which fully supports its risk data aggregation capabilities and risk reporting practices not only in normal times but also during times of stress or crisis, while still meeting the other principles.”
Principle 2, as well as Principles 3 and 7, represent the data and IT architecture components of BCBS 239 and from BearingPoint’s experience it is these Principles which are giving G-SIB banks the biggest headaches.
On BearingPoint’s own experience with BCBS 239, Maciej outlined how the challenge of building a data reporting infrastructure that is simultaneously agile, scalable and flexible, to be then delivered within the tight deadline asked of them has been their number one challenge.
The difficulty faced by G-SIB, and now D-SIB banks, to similarly create new data and IT architectures that are 239 compliant is a key piece in what Maciej calls “The Puzzle of Challenges” that banking organisations face.
This refers to a number of interlocked obstacles that banks are having to navigate in order to become fully compliant. They include overcoming technology limitations for aggregations and analytics, talents and skills, creating an easy migration and onboarding path and moving towards a model of IT architectures of dependencies, where there is so much overlap between the various risk and regulatory requirements that it becomes impossible to continue to silo any longer.
Throughout their experiences in building BCBS 239 solutions for clients, BearingPoint have identified 3 core pillars which they adhere to in order to ensure a successful outcome: Reporting, Analytics and Management.
Maciej explained how for their own reporting and aggregation solution to work, it had to be a standardised model that operated in the same way for all clients, both large and small. In addition, the single data model had to be scalable; so for their Abacus360 solution this meant providing a flexible component model which housed toolsets and modules that could handle each individual facet of BCBS 239, as well as other data aggregation requirements, all within one standardised system.
Day Two
Day Two began with BearingPoint running an interactive workshop on UKRep; the concept of bringing the UK banking industry together through the use of a single industry utility for regulatory reporting. UKRep was presented at a recent FCA Techsprint event where it was awarded the JUMP award by a cross industry panel of judges.
Speakers Alexander Grimm and Mark Shead, both from BearingPoint, used the example of AuRep; a single industry reporting utility with an industry agreed data model, which is now used by over 90% of the Austrian banking market and which has seen significant savings across the entire country.
Using the interactive polling tool, over 40% of the audience — major financial institutions from various countries in Europe — said they had to deal with more than 10 parallel streams and projects related to regulatory compliance, which all last longer than 12 months. BearingPoint presented an opportunity to streamline these regulatory change projects whilst creating larger data lineage in line with BCBS239 principles through industrialisation and standardisation.
Following the workshop, BearingPoint kindly moderated our panel discussion on The Role of RegTech in Risk Data Aggregation and Reporting. As an experienced RegTech provider currently grappling with BCBS 239, BearingPoint were ideally placed to steer the direction of this particular panel.
Alongside BearingPoint’s Maciej Piechocki as moderator, we were pleased to have on the panel two Risk Data professionals from major influencers within the UK financial industry: Elaine Priest of RBS, who heads up their RDAR function, and Beju Shah, a Senior Expert in Regulatory Data and Technology at the Bank of England were both present to give their takes on the BCBS 239 challenge and to share how their own organisations have responded to the new regulation.
The panel discussed the inherent challenges that come with creating the infrastructure for an effective BCBS 239 response. Indeed, Elaine noted that there are significant implications that come with the regulation for data profiling, data lineage and ownership of data.
“Data has to be owned by the person creating it” (Elaine Priest, RBS)
On this topic of data ownership, one of the longer talking points of the discussion was prompted by a question posed by the moderator: namely, what is the importance of creating a Chief Data Officer (CDO) role when trying to become compliant with BCBS 239?
Both the panelists as well as the regulators present all came together in agreement that implementing a CDO role in some capacity was highly conducive to becoming BCBS 239 compliant.
And yet, when the moderator followed up by asking how many of the major banking organisations present in the room had already installed CDO roles within their operations, only four of those 30 delegates in attendance raised their hands.
In response to this, the regulators all sought to reaffirm the importance of creating a Chief Data Officer position in some capacity. Indeed, both Beju Shah and Vincenzo Re from the Bank of Italy’s Banking Supervision Department spoke on how their institutions have both recently installed Directors of Statistics to oversee their own data operations, which in turn has helped to eliminate silo-based mentalities when it comes to risk reporting.
On the Standardisation Trend in Risk Profiling
Throughout our time working with BearingPoint, they have consistently stated how they are betting big on the industry moving towards a standardised approach to risk data reporting and as such, BearingPoint have tailored their solution offerings like Abacus360, FiTAX and EasyTax around this core assumption.
This assumption was shared by the other members of the panel. Beju Shah explained how at the Bank of England they are seeing the industry ask more and more for examples of standardised models of reporting from them. Beju argued that the move toward standardisation is a good thing and that it is already proving beneficial to banking organisations and data operations in general:
“…through the implementation of standardised data collection, we are seeing better data come in through the door and organisations are seeing 70% savings in business time used for data collection.” (Beju Shah, Bank of England)
Wrapping up the discussion, Maciej asked the panel how likely they felt it was that the majority of banks would be fully compliant with BCBS 239 with the next 3 years.
Elaine Priest felt that this was certainly an achievable objective, provided that the industry took certain steps together such as the sharing of best practices within each local tax jurisdiction.
Beju Shah also believed that a 3-year timetable was ‘probably’ a realistic one. He explained how he is seeing data maturity across the industry is now take form and that more collaboration between all players will help with that journey. At the very least Beju argued, many of the Principles of BCBS 239 will “…be in place, if imperfectly to begin with by 2020”.
From speaking with delegates at the event it was clear to us that they found enormous value in having the opportunity to speak not only with regulators, but with industry peers and solution providers as well who all share a common challenge in ensuring that the BCBS 239 is adhered to as closely as possible, within a plausible timeframe.
It was a pleasure to work once more with BearingPoint to provide our delegates with this opportunity to get clarity on the challenging regulation, and to share knowledge and insights in to how they and other industry players are confronting the BCBS 239 challenge.
To find out more about BearingPoint, please visit their website and follow them on Twitter.
Thomas Bannister
Digital Marketing
Marcus Evans
101 Finsbury Pavement,
London, EC2A 1RS
