The ever-evolving financial landscape demands efficient and clear regulatory data collection. Recognizing this need, the Bank of England (BoE) and the Financial Conduct Authority (FCA) are joining forces with the industry to revolutionize data collection processes. This collaborative effort, spearheaded by the Transforming Data Collection (TDC) program, aims to achieve a win-win situation for both regulators and firms.
A Shared Vision: Less Burden, More Insight
Launched in February 2021, the TDC program is built on the fundamental principle of “regulators get the data they need to fulfil their mission, at the lowest possible cost to industry.” Three key areas are central to achieving this vision:
- Standardization: Defining and adopting common data standards across the industry will streamline data collection and analysis.
- Modernization: Upgrading reporting instructions will enhance clarity and efficiency.
- Integration: Integrating reporting requirements will further reduce the burden on firms.
Industry Collaboration Drives Change
The TDC program leverages industry expertise through a joint collaboration framework. Industry recommendations, gathered through use case analysis, are instrumental in shaping the program’s direction. The latest industry recommendations for phase two use cases have recently been published.
Five Key Outcomes: A Clear Roadmap
Building on the learnings from the TDC program, the BoE and FCA have outlined five key outcomes for the next 18 months:
- Proportionality: Data collections will meet regulators’ needs without placing unnecessary burdens on firms.
- Internal Efficiency: Streamlined internal processes will ensure efficient creation and management of data collection initiatives.
- Regulatory Compliance Support: Initiatives will be implemented to provide effective support for firms in meeting their regulatory reporting obligations.
- Data Clarity: Consistent and clear data definitions will enhance data quality and usability.
- Modern Infrastructure: Implementing modern systems will underpin future data collection initiatives.
Workstreams for Delivering Transformation
To achieve the outlined outcomes, the BoE and FCA are undertaking a series of workstreams:
- Reviewing Existing Collections: Ongoing reviews will identify redundant data collection elements and target new collections to address reporting gaps.
- Streamlined Processes: Initiatives will focus on streamlining collection processes and developing user-friendly interfaces for firms. This includes exploring the possibility of a Single Firm Portal and a dedicated Firm Communications Portal.
- Industry Standards: Collaboration with the newly formed Industry Data Standards Committee (IDSC) will foster clear and consistent data definitions across the industry.
- Modern Technology: Establishing a shared technology roadmap will pave the way for implementing modern systems that support efficient data collection.
The UK’s departure from the European Union presents a unique opportunity to re-evaluate data collection practices. By leveraging the TDC program’s collaborative approach, the BoE and FCA aim to establish a future-proof data collection system that meets the evolving needs of regulators and the industry as a whole.
The TDC program serves as a shining example of how collaboration between regulators and industry can lead to a more efficient and effective data collection landscape. As the program progresses, we can expect to see a significant reduction in the burden on firms while ensuring regulators have access to the data they need to effectively fulfill their mandates. This, in turn, will contribute to a more stable and secure financial environment in the UK.
