Bearing Point Institute: A Real-Time Reporting Process
is it possible ?
This explanatory video (in English …) presents the sixth report of the Bearing Point Institute, a top international consulting firm. This special issue is devoted to international financial services, and more particularly to the difficulties created by the proliferation of regulations in Europe, following the crisis of 2008, on the regulatory reporting to which financial institutions are subject.
A much more practical and modern solution of reporting is envisaged, provided that the financial sector is ready for the radical transformation that would put it in place …
The 2008 financial crisis revealed huge data issues in the financial system.
Only with quality, comparable and timely data can regulators assess risks and restore confidence in the financial system.
But, the increased reporting requirements could end up posing big problems for financial institutions because the costs of compliance also penalize banking activities.
Today, all EU banks are required to submit up to 700,000 basic data per quarter, in different states, and this only for prudential reporting.
If we add the requirements related to statistical reporting – that’s a lot more.
It’s not only tedious and expensive for the financial sector,
but it always leaves him exposed to systemic risk.
A new regulatory value chain is needed in the 21st century. The current forms-based process hampers the quality of data and the effectiveness of regulatory reporting.
Hence the need for greater integration and automation.
In Austria, the country’s central bank and banks worked together on the development of a new reporting model.
Each regulated entity enters its data into a standard “data cube” defined by the central bank and based on the BearingPoint ABACUS platform.
These are grouped into a series of “smart” cubes defined according to the type of activity and the associated regulatory requirements.
A common service company, called AuRep, manages the shared regulatory reporting platform, ensuring that the banks and the regulator are aligned with the model they have defined together.
It is still too early to say, but this approach could represent a way forward for regulatory reporting.