To meet its mission in a changing world, the Bank needs to make the best use of data, analytics and technology. Making the best use of data and analytics (D&A) is critical for the Bank. It means our decisions are informed with the best possible information and analysis; our operations are even more efficient and risks better managed than today; and we publish timely, reliable, and high-quality data and statistics for the public good.
The Bank therefore welcomes the recommendations in the IEO report on how it can build on what has already been achieved with respect to the three themes discussed in the review.
In recent years, the Bank has made significant progress in the use of data and analytics. There has been a steady increase in the number of staff using the Bank’s new set of core analytical tools and, in some areas, we are pioneering the application of machine learning in central banks. We have also further improved management of our critical data, built new tools to analyse the Bank’s largest data sets and delivered new insights, including through an enhanced dashboard to explore changes in the diversity of our workforce. The Prudential Regulation Authority (PRA) has set out clearly its priorities on data and analytics, and we continue to work with the Financial Conduct Authority (FCA) and industry to deliver our plan to transform data collection from the UK financial sector.
However, as the IEO evaluation explains, we will need to do more in coming years to meet our ambition.
Delivering our vision will require: consistent sharing and management of, and access to, the Bank’s data; effective collaboration across the Bank; a strong and effective framework and governance for data and analytics; a clear and consistently funded roadmap towards a target technology and data architecture for the Bank; and for all parts of the Bank to define their strategic goals for using data to support their business functions.
The Bank’s Executive has agreed a refreshed high-level data and analytics strategy that describes, through a set of missions and foundations, how the Bank intends to achieve its vision and the necessary change involved. The refreshed strategy is consistent with, and informed by, the 10 recommendations set out by the IEO in its report, as described below.
This work will, necessarily, take time. Looking ahead, the Bank will now undertake the detailed planning needed to implement the strategy and set out a timeline for a roadmap for change, including for the technology and data architecture, and the budget to deliver the investment necessary to implement it. This will be incorporated progressively into the Bank's current and future annual budget and planning processes, and an update will be provided to the Bank’s Court in the first quarter of 2024. The Bank will also communicate on progress externally in that quarter and will then publish the strategy, its plan for 2024/25, and three year change roadmap in the Bank’s next Annual Report.
The following material sets out the IEO’s themes and individual recommendations, along with the Bank’s response to each.
Theme 1: Agree a clear vision for data and analytics, supported by a comprehensive strategy and effective governance
The Bank welcomes the recommendations under this theme to agree a clear vision for data and analytics, supported by a comprehensive strategy and effective governance.
IEO Recommendation 1: Agree and champion a vision for data use, matching funding to ambition
To meet its mission in a changing world, the Bank needs to make the best use of data, analytics and technology. This includes building modern technology foundations and digital working capabilities, and improving its ability to adapt, innovate and change with greater agility.
As the IEO report explains, achieving this vision requires consensus and a shared understanding of the Bank’s vision and what it means across all the Bank’s functions. To support that, the Bank is refreshing its D&A strategy to make clear to everyone across the organisation how the Bank will make the best use of data to fulfil its mission. This will build upon successes from previous strategies and existing initiatives to improve and exploit the platforms, tools, training and reference data that have already been established.
To support a consistent and coherent approach to data across the Bank, the strategy will be accompanied by a set of Data and Analytics Principles that will set the tone for how we use data and approach analysis at all levels of the organisation. The Principles require that all D&A activities drive Bank-wide, strategic improvements in its data and analytics capability.
Table A: D&A Principles
We take a Bank-wide approach: we work from shared systems, common data and collaborate on analysis
We start with business outcomes: we use data to support business outcomes, and enable experts in the business to build accessible interactive tools for users to interrogate data
We manage our data consistently, securely, transparently and ethically, promoting trust, extensive sharing and safe innovation
The Bank’s senior leaders are committed to championing the data and analytics vision, strategy, and Principles. This response has been agreed by the Bank’s Court of Directors, along with the underlying refreshed high-level strategy. The refreshed strategy will be incorporated progressively into the Bank's current and future annual budget and planning processes and the Court of Directors will oversee the allocation of funding necessary to achieve it. The Bank will publish, in its next Annual Report, its plan for 2024/25 and a three-year change roadmap for implementing the strategy, and provide updates in subsequent Annual Reports with the Court of Directors agreeing any changes. Progress and spending will be reported to the Court of Directors on a quarterly basis.
IEO Recommendation 2: Collaboratively design deliverable Bank-wide and local business area data strategies to meet measurable business outcomes
The Bank agrees that making the best use of data can only be achieved through a collaborative approach across all parts of the organisation. The refreshed Bank-wide strategy is therefore a close collaboration between the central Data and Analytics Transformation, Technology, and People Directorates, along with all business areas of the Bank. As recommended by the IEO, the strategy will be guided by both an overarching vision for the Bank and, critically, local business areas’ own visions for how they want to make the best use of data to achieve their specific business outcomes.
The Bank-wide strategy will be comprised of a set of Bank-wide ‘missions’ – priority areas of change – and ‘foundations’ – activities that underpin and cut across all D&A activity in the Bank. These have been informed by consultation with business areas across the Bank.
Table B: Data and analytics strategy missions and foundations
1. Make it easy for people to access and connect the data they need.
2. Collaborate with UK and international organisations to share data and drive adoption of data standards and best practices.
3. Modernise how we analyse data and inform decisions.
4. Enable the Bank to take full advantage of emerging innovative technologies such as artificial intelligence and machine learning.
Architecture, policies, and governance.
Tools, platforms, services, and data sets.
Skills and culture.
The Bank also agrees with the IEO that a critical foundational element in the revised strategy is a target state for the Bank’s data and analytics, and broader technology and capability, architecture. The Bank has therefore launched an initiative to articulate a description of the Bank-wide target architecture for data and analytics that will meet the different needs of business areas across the Bank. This is essential to create a data and analytics ecosystem across the Bank that all colleagues can benefit from. The Bank will maximise the benefits of investment in this critical area by governing data and analytics change initiatives across the Bank so that they work in lockstep with the strategy and make a clear contribution to the roadmap for the Bank’s technology and data architecture.
In line with the IEO’s recommendations, the Bank will also drive better use of data in several priority business initiatives and mature its approach to benefits realisation management. This will include the creation, and regular reporting to Court, of a set of quantifiable metrics that demonstrate the progress being made.
IEO Recommendation 3: Ensure governance structures can support the agreement, co-ordination and monitoring of data transformation, with clear accountability for delivery
The Bank is committed to strengthening its governance around data and analytics in order to achieve a consistently implemented strategic approach, and has already taken steps to effect that.
Most significantly, in May 2023 the Bank established a new Data and Analytics Board (DAB) that will fill the Executive-level gap identified by the IEO. The DAB is responsible for ensuring that the Bank has a clearly articulated, well understood and executed data and analytics strategy; and for considering whether it has the people, processes (including governance and data management), and tools in place to achieve its strategic goals for data and analytics. The DAB will also oversee how Bank-wide services, such as tools, training and technology, are being developed, used and improved.
The DAB is co-chaired by the Chief Data Officer and the Chief Information Officer, with membership comprising Executive Directors and Directors from each part of the Bank. The creation of the DAB establishes a federated governance model for the Bank. DAB is responsible for the overall Bank-wide data and analytics strategy, with business area Data Boards responsible for overseeing consistent and mutually supporting local data and analytics strategies that are attuned to local business needs.
DAB members operate under delegated responsibility from the Bank’s Deputy Governors, who are ultimately accountable for ensuring that their areas have articulated their local data and analytics strategies. In addition, the Deputy Governor for Monetary Policy has overall responsibility for the Bank’s D&A strategic missions, ensuring they are delivered in a way that effectively serves the Monetary Policy, Financial Policy and Prudential Regulation Committees. The Chief Operating Officer is accountable for ensuring that the necessary strategic foundations – technology, people and processes – are in place to deliver the strategy, working through the Chief Information Officer, the Executive Director for People, and the Executive Director for Change and Planning respectively.
The Chief Data Officer (CDO) reports to both the Deputy Governor for Monetary Policy and the Chief Operating Officer, and is responsible for maintaining and implementing the strategy. The CDO works with the Chief Information Officer, who owns and implements the agreed roadmap for the Bank’s technology and data architecture.
In line with the IEO’s recommendation to introduce accountability devices, the Bank will set specific data objectives to make clear the responsibilities for Governors and members of the Bank’s Executive team, including DAB members, whose roles are important for delivering the D&A strategy.
Reflecting the need to ensure a consistent and coherent approach to data and analytics, the DAB will be responsible for establishing and maintaining processes to ensure that investment projects are consistent with the Bank-wide Data and Analytics Strategy and Principles.
One of the DAB’s first actions, consistent with the IEO’s report, was to commission a broader review of data governance groups across the Bank. The goal is to create a stronger, simpler structure that is more consistently implemented across the Bank. The DAB will periodically review the Bank’s data-related governance structure and supporting functions, such as the D&A Business Partners (Recommendation 4) to make sure they are functioning as effectively as possible.
Theme 2: Break down institutional, cultural and technological barriers to keep the Bank’s data and analytical practices in step with a changing world
The Bank welcomes the recommendations under this theme to break down institutional, cultural and technological barriers to keep the Bank’s data and analytical practices in step with a changing world.
The Data and Analytics Board will provide cross-Bank leadership, while local data and analytics Boards will provide the transparency and alignment needed to facilitate cross-Bank collaboration by ensuring oversight of local data and analytics strategies and projects.
The Bank will explore new ways of working to help increase collaboration. A promising model is the ‘taskforce’ approach established this year for two projects (Transforming Data Collection and artificial intelligence). These bring together experts to align areas of work running across multiple areas of the Bank. The experience so far has been positive and demonstrates the benefits of taking a Bank-wide approach in important areas of change. On Transforming Data Collection, the Bank has followed the Government Digital Service best practice on service design and brought together all relevant perspectives in a series of workshops to develop a roadmap and structure for the next phase of the multi-year change program.
The Bank is also committed, as recommended by the IEO, to fully implementing the D&A Business Partner model. This function will translate and connect between business areas’ desired outcomes and the support offered by the Bank’s central data and analytics service teams. By providing a Bank-wide service, D&A Business Partners will be well placed to identify opportunities to collaboratively solve data and analytics issues that span multiple business areas, as well as facilitating their more efficient resolution.
The Bank welcomes the IEO’s recommendation to agree the approach to sharing data and analysis inside and outside the Bank. Data sharing will be a central part of the refreshed strategy and will be embedded in both the D&A Principles and the target state data and analytics architecture. Effective data sharing creates a number of benefits, including more comprehensive information for decision makers, better quality data and analysis, and efficiency gains.
It is also important to recognise that the Bank is subject to statutory confidentiality obligations in the sharing of certain data held by it.
Taking the above into account, internally, the Bank will establish a storage architecture and catalogue that enables everyone in the Bank to find, understand, access and combine data and connect it to the Bank’s analytical toolset, enabling colleagues to use a cloud-based suite of data systems along with extended coverage of master and reference data.
The D&A Principles will describe how data should be shared inside the Bank. Wherever possible, and subject to legal limitations and practical considerations, we will collect and acquire data once, assign responsibilities to manage it throughout the data lifecycle, and make it available to all with a need. We will also create data and analytics models in a collaborative way, considering how models can be used across the organisation from the outset, sharing analytics methodology openly, and re-using approaches wherever useful and effective.
Cultural change is also required and it will be the responsibility of senior leaders, working with all colleagues, to champion effective data sharing.
Externally, the Bank will collaborate with UK and international organisations to share data. This will require working collaboratively with those organisations to establish clear data sharing processes and policies, with appropriate governance to facilitate and monitor safe data sharing. With the necessary guardrails in place, the Bank will look to make its data available, where possible, to researchers and the wider public in an open, accessible and timely manner.
IEO Recommendation 6: Narrow the gap with modern data and analytics practices, with the most impactful initial step being a phased migration to cloud
The Bank has made great strides towards more modern practices, for instance by enabling the use of a core set of analytical tools, such as R, Python, and Tableau. One in five people across the Bank have coded in R or Python and six in ten have accessed a Tableau dashboard over the past 12 months. In the past 18 months since the launch of the D&A Platform – which enables analysis of the Bank’s largest data sets by providing staff with a single, shared environment through which they can interact with all aspects of their analytical process from storage to reporting – we have on-boarded 270 business users and dozens of data sets.
More can be done to fully embed these analytical tools and their application to inform data-driven insights. A priority will therefore be to ensure the effective adoption of our tool set across the organisation, including by making sure these tools can effectively access the Bank’s core data sets. At the same time, the Bank will continuously improve the analytical tool set and increase awareness, accessibility, and adoption of Bank-wide tools, platforms, services, and data sets.
The IEO notes that moving to the cloud has the potential to be a powerful technological step to embedding modern data and analytics practices. The Bank agrees and will define its strategy for organisational-wide cloud adoption, aligned to the target state for the Bank’s data and analytics, and broader technology and capability, architecture. It will also accelerate its existing efforts to move its data and analytics capabilities to the cloud, and will provide an update report on this in the next Annual Report.
IEO Recommendation 7: Systematically monitor and experiment with new approaches and technology for data and analytics
The Bank has taken significant steps to facilitate increased uptake of programmatic analytical tools; created centres of excellence, most notably the Advanced Analytics Division; and, through the Data and Analytics Platform, provided a storage option for staff to host and experiment with ‘big data’.
The Bank is committed to building on this success to harness the opportunities of new technologies. Most notably, the Bank has established a cross-organisation task force on Artificial Intelligence (AI). AI has the potential to be transformational for the organisation. The AI task force will investigate how the Bank can best achieve its objectives through the safe and effective application of AI. Throughout, the Bank will ensure that its use of AI adheres to a clearly defined ethical framework.
The taskforce will identify the most promising use cases around the Bank, explore technical requirements, and establish and socialise necessary safeguards, including an ethical framework, that help the Bank use AI safely. It will make a recommendation about the future governance of the use of AI internally, ensuring best practice is shared effectively across the organisation.
The Bank recognises that it has much to learn from others about the effective use of AI. It will therefore actively engage with external organisations to better understand data and analytics best practice, share experience, and work on joint projects where appropriate. The Bank will also consider how to establish a technology environment to enable experimentation in innovative technologies and ensure that the resulting tools can be put into production.
The Bank will also establish a mechanism to receive external peer review on its data strategy and its plans to construct the new roadmap for the Bank’s technology and data architecture.
To build the understanding of senior staff on these issues and the application of new tools and technology more broadly, the Bank will also explore offering executive coaching to its senior management team.
Theme 3: Ensure staff have the support and skills they need to work effectively with data
The Bank welcomes the recommendations under this theme to ensure staff have the support and skills they need to work effectively with data.
IEO Recommendation 8: Embed common standards to make data and analysis easily discoverable and repeatable
The Bank agrees that its data and analytics guidance needs to be comprehensive, easy to find and appropriately incentivised.
Accordingly, the Bank will roll out refreshed data and analytics policies by the end of 2023/4. These policies will provide staff with comprehensive guidance on data management and analytical processes, and will be informed by industry good practice. All business areas will be consulted on the approach to implementing the policies, drawing on service design principles. Combined with actions planned to increase the ability to share data (Recommendation 5), the new policies will enable the discoverability, and reliability, of data and analysis within the organisation.
The roll out of the new policies will be accompanied by support for staff, including supporting actions on skills and training. And the new D&A Principles will emphasise the need for sharing data and analysis.
Furthermore, the Bank will explore how moving to the Cloud could enable it to embed modern data management practices such as plug-in enhanced capabilities around discoverability and cataloguing, which should make it easier for colleagues to register data sets, for instance.
As recommended by the IEO, the Bank will continually review engagement and adherence, including the need for new or additional training.
The Bank will also bring together a long-term roadmap on its plans to transform our data collection from the UK financial sector and publish that in 2024. The Bank’s joint programme with the FCA and industry involves around a dozen full-time nominees from industry, with a further 100 industry experts and leaders involved in the advisory teams and committees. The Bank will also review its approach for acquiring commercial data, including value-for-money considerations.
IEO Recommendation 9: Provide staff with the easily accessible support and guidance they need across the data lifecycle
The Bank recognises the importance of providing staff with easily accessible support and guidance. The Bank currently provides a range of useful data and analytics support services, including a Data Collection Hub, a D&A helpdesk as a single point of contact for staff on data and analytics issues, and expert support from the Analytics Enablement Hub.
The Bank will build on this by delivering enhanced support and training that will bring all staff up to the ‘data literacy’ level required for their roles. It will also extend and expand the existing learning support with specialist training for data professionals.
User communications and engagement will be prioritised to increase staff awareness and understanding of the services and support available. A blend of self-service and central guidance and support will be available, through which staff will be able to easily find and access the support they need through multiple channels such as the Helpdesk and, for more specialist issues, dedicated advisory support. The Bank will make the D&A helpdesk and central support more accessible and easier to find by adding a quick link to staff desktops and the front page of the intranet. Organisational demand for D&A support will be tracked and measured, which will enable the Bank to prioritise areas that require additional resources, and allow it to build more targeted engagement and support.
IEO Recommendation 10: Develop a comprehensive data skills strategy encompassing hiring, training, retention and role mix
The Bank agrees that a comprehensive data skills strategy is a key enabler for more effective use of data. Over the recent past the Bank has built learning solutions that are addressing known demands across the organisation. During the first half of 2023 an initial D&A skills framework was defined, which identifies the minimum skill level required for different role types that require different D&A skills. The Bank will continue to review and update this framework to ensure that it reflects the Bank’s requirements and effectively integrate it as a key pillar of the Bank’s overall Talent strategy. As part of this, the Bank will define a methodology to identify D&A skills gaps across the Bank using the skills framework, and prioritise and systematically close these priority gaps.
The skills strategy will include learning solutions for all role types. For example, the strategy will aim to bring all data consumers up to the level of ‘data literacy/fluency’ required for their role. Data professionals will receive an extended and expanded version of our current learning offering that meets demand and more broadly supports the Bank’s implementation of its refreshed strategy and response to the IEO’s recommendations.
The Bank also needs to ensure that the contribution of data specialists is maximised and that they have a fulfilling experience. To support this, the Bank will define and embed the career proposition for data professionals, and explore creating a heads of profession model for data science and scaling its use of data science apprenticeship schemes.
The Bank will also embed D&A considerations as a key pillar of the Bank’s approach to talent management and in its local people, talent, skills, and culture strategies.