On 23 February 2021, the Bank of England (BoE) published ‘Transforming Data Collection from the UK Financial Sector: A Plan for 2021 and beyond’. The document is the BoE’s plan to transform its ability to collect data over the next decade.
The document is the BoE’s 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. These strains include technological advances and automation that mean that more data than ever before is being created and captured.
The document notes that both the BoE and industry will need to transform how data is managed and collected. In particular, it identifies three key reforms that need to take place:
- Defining and adopting common data standards that identify and describe data in a consistent way throughout the financial sector. These common standards should be open and accessible for use by all who need them. Their adoption will bring benefits well beyond reporting.
- Modernising reporting instructions to improve how regulatory reporting instructions are written, interpreted and implemented. The BoE feels that there are a range of steps that this will involve, from setting up better Q&A processes to potentially rewriting instructions as code.
- Integrating reporting to move to a more streamlined, efficient approach to data collection. This reform includes making data collection more consistent across domains, sectors and jurisdictions, and designing each step in the data collection process with the end-to-end process in mind.
To help deliver the reforms set out in the document the BoE and the FCA want to set up a multi-year, and multi-phased, transformation programme. The regulators want this programme to be delivered with an iterative and pragmatic approach. During each phase they will aim to deliver a series of ‘use cases’ focusing on particular collections or types of collections. Each use case delivered will add value in its own right, as well as delivering improvements that can then be applied to other collections over time. The regulators expect the first phase, taking place over the next 24 months, to deliver improvements and lessons for the future, but to only impact a small number of selected use cases. The second phase, taking place over roughly the subsequent three years, will focus on expanding the transformation into new areas with an increased focus on integration. Subsequent phases will scale the transformation to maximise value.
The PRA and FCA have also published a joint Dear CEO letter concerning transforming data collection.