Joint transformation programme update
The Bank of England (the Bank) and the Financial Conduct Authority (FCA) are working together with industry to transform data collection from the UK financial sector. We are doing this through a joint transformation programme. In this publication we provide an update on the joint transformation programme since our last communication in October 2022 including:
- the progress of the programme and the phase two use cases;
- an update on the Data Standards Review; and
- information about our Town Hall event taking place on Tuesday 29 November.
Our update also provides information on the launch of the PRA’s Banking Data Review.
Phase two of the joint transformation programme began on 22 September with an in-person event for the teams working on the programme day-to-day.
Following the kick-off event, a period of mobilisation began for the Commercial Real Estate (CRE) data and the Strategic Review of Prudential Data Collection (SRPDC) use cases. Mobilisation for both of the use cases ran for a period of four weeks. During this time, the programme delivery teams planned for the 'discovery and design' stages of their work.
During the ‘discovery and design’ stages the delivery teams will explore what the issues are, for both regulator and regulated, for each of the use cases, before designing solutions to address these issues.
Following our nominations process earlier this year, the memberships for both the Data Standards Committee (DSC) and the Reporting Transformation Committee (RTC) have been refreshed. Many of our members from phase one have chosen to stay with us for phase two but we have also welcomed many new members.
The first meeting of the DSC took place on Thursday 24 November and the first meeting of the RTC has taken place today (28 November). The minutes from both of these meetings will be published to our webpage in the coming weeks.
Update on the phase two use cases
Commercial Real Estate (CRE) data
We are looking again at Commercial Real Estate (CRE) data in phase two.
CRE was one of the TDC phase one use cases. The work during phase one confirmed our initial hypothesis about CRE data: it’s crucially important data, but the current data the regulators get is a poor fit for their needs, fragmented, and burdensome to collect.
The CRE phase two delivery team are currently in the ‘discovery’ stage which will run until Q1 2023. During this stage they will focus on:
- Exploring business practices and processes
- Mapping user journeys
- Creating a project roadmap
- Creating problem statements
Following the discovery work, the team will move into the ‘design’ stage. The work during this stage will be focused on designing and testing solutions for the use case based on the findings from discovery. This work will run until 2023. We expect the use case to finish with the industry committees issuing recommendations to the Bank and FCA. Any industry use case recommendations, and the work to support those recommendations, would then be considered by the relevant parties before deciding next steps. For instance, the Bank and FCA will consider any recommendations directed towards them.
Strategic Review of Prudential Data Collection (SRPDC)
The Strategic Review of Prudential Data Collection (SRPDC) is a new phase two use case. For a prudential regulator, the prudential data the PRA and FCA get from firms is typically some of the most important data they receive. However, this data is some of the costliest for firms to produce. We are therefore exploring how we can streamline and improve these collections, with lots of opportunities to deliver value to firms and regulators.
The delivery team are currently in the ‘discovery’ stage for the FCA focused Strategic Review of Prudential Data Collection from solo-regulated firms (SRPDC) use case. The ‘discovery’ stage for this use case will run until Q1 2023.
As with the CRE use case, the SPRDC ‘discovery’ stage is an opportunity for the team to get insight into the problems that currently exist for both firms and regulator.
The team have begun conducting user research interviews, the majority with firms that submit the data. During the interviews, the team want to understand how both industry stakeholders and internal FCA stakeholders find the current reporting process, and what specific challenges they have. Once the user research is complete, the team will analyse the outcomes to draw out key themes.
As with the CRE use case, following the discovery work the SRPDC delivery team will move into the ‘design’ stage, with the stage ending with the industry committees developing recommendations for the use case.
Retail Banking Business Model Data
The FCA currently collect detailed product-level financial data across a range of retail banking products and segments. The data is critical to support the FCA’s competition objective and is reused by a variety of other stakeholders across the FCA. However, the data are currently collected ‘ad-hoc’, haven’t been designed in an integrated way to best meet the needs of all of the users of the data, and is very costly for firms to provide. The FCA want to move this to a regular collection and design a new integrated collection that minimises burden on firms. Further, designing the ‘retail banking business model’ implementation as part of TDC will allow the joint transformation programme to explore the extent to which business model data can be standardised within a tight scope of relatively homogeneous firms.
The ‘discovery’ stage for the Retail Banking Business Model Data use case will begin in Q1 2023. If you have views on the current process for retail banks providing data to the FCA and are interested in participating in this work to improve that process, please get in contact TDCSecretariat@bankofengland.co.uk.
Incident, Outsourcing and Third-Party Reporting (IOREP)
Ensuring the operational resilience of the financial sector is a key priority for the Bank of England, PRA and FCA. However, operational resilience is currently an area where the regulators lack high quality, consistent data. Policy makers are considering the development of new incident, outsourcing and third-party reporting policies. You can find more information about the operational resilience policy on PS6/21 | CP29/19 | DP1/18 Operational Resilience: Impact tolerances for important business services. By considering the design of this reporting policy as part of the joint transformation programme, we can help ensure this critical data is delivered in a way that minimises the impact on firms. At the same time, we think the use case will provide a chance to explore how best to deliver ‘event’ driven collections, where a new report is triggered when a given event occurs.
The ‘discovery’ stage for the Incident, Outsourcing and Third-Party Reporting (IOREP) use case will begin in Q1 2023. We are in the process of procuring consultants to work on this use case. The team have also been sourcing indications of interest for the use case from a wide range of areas from across the financial sector. If you would be interested in providing resource for the IOREP case, please contact TDCSecretariat@bankofengland.co.uk to find out more information.
Phase one recommendations
In July the joint transformation programme's industry committees made a number of recommendations about how to improve the reporting process. The recommendations targeted a selection of issues and improvements within the scope of the phase one use cases: the quarterly derivatives statistical return ‘Form DQ’ and the Financial Resilience Survey (FRS).
Further, the Bank and FCA committed to deliver a number of recommended solutions by end of June 2023. Both organisations are on track to meet those commitments.
The Bank are finalising the recruitment they need to carry out the work.
The FCA have begun work to develop and implement the recommendations for their use case.
- The FCA has published its consultation on the Financial Resilience Survey, which proposes to implement the recommendations from the Phase One use case. The consultation closes on 2 December 2022.
- Intuitive Form Design - the FCA is implementing a newly designed consumer credit form which is completed annually by approximately 20,000 firms. We will measure the benefits for user experience and data quality and scale the design improvements across similar forms.
- Firm Portal - in Phase One we heard feedback from firms on having to use multiple regulatory systems. The FCA will shortly instruct consultants to complete further discovery and early design for a new firm portal creating a single, unified regulatory reporting platform, with options expected in March 2023. Alongside this, a pilot is being delivered to test the functionality to reflect data submitted back to reporting firms.
- Lastly, improvements to the end-to-end service design of the firm collection process are being captured and fed back into the ‘BAU’ collection process. This ensures improvements from TDC are then implemented for any new collections that are being designed.
Data Standards Review
On the 26 October, we published an update on the Data Standards Review commissioned by the Data Standards Committee during phase one of the programme. The review is looking at key questions around the development and adoption of data standards in the financial sector. Answering these questions will inform the programme’s future strategy in relation to common data standards.
In our update, we invited industry to provide their views regarding data standards to help inform the review. Having input from industry will ensure the review is being open, collaborative and transparent, and enable us to get the widest range of views to get the best solutions to the issues we are tackling.
EY are conducting two activities that enable industry to feed into the review. Firstly, the review team are conducting a series of interviews with various selected stakeholders in the financial sector to gather their views on relevant data standards questions. In addition to this, EY launched a dedicated online portal on the 24 October where industry were invited to submit their views on three specific data standards ‘challenges’ that the programme seeks to address.
The first two ‘challenges’ discussed on the portal addressed 1) the benefits of data standards for financial services, and 2) how such standards should be developed and managed. Both ‘challenges’ generated lots of informative contributions from industry.
The third and final ‘challenge’ topic for discussion on the portal is ‘What drives adoption of data standards in financial services'. The dedicated online portal is open until Tuesday 6th December for industry to submit their views. If you would like the opportunity to feed into this ‘challenge’, please visit the online portal and join the discussions.
Once the interviews and online discussions are complete, the findings from the review will be collated into a report, which will be published on the TDC webpage early in 2023.
Banking Data Review
Our vision for Transforming Data Collection is that we ‘get the data we need to fulfil our mission at the lowest possible cost to industry’.
Up until now the Bank’s work on Transforming Data Collection has been focused on improving ‘how the Bank collects data’. But to ensure we ‘get the data we need’ we need to consider which data we collect, and at the frequency with which we receive that data.
In the PRA’s Future Approach to Policy (DP4/22), the PRA announced it was launching a ‘Banking Data Review'. The review will look at what data it collects currently and what data the PRA needs now and in future. This is initiative is being run separately by the PRA however, it is complementary to the work being carried out by the joint transformation programme.
In line with our broader work on transforming data collection, the PRA expect the ‘Banking Data Review’ to be a multi-year project.
How to get involved
To launch the review, the PRA are planning a dedicated launch event early next year – mostly directed at heads of regulatory reporting at banks. Dates of the event are currently being looked at and details will soon be shared with firms. If you would like to receive information about that event, find out more about the Banking Data Review and be added to a mailing list for news and announcements, please contact TDCSecretariat@bankofengland.co.uk.
As previously advertised on our webpage, the Transforming Data Collection (TDC) joint transformation programme are hosting a Town Hall event at the Bank of England’s Moorgate building on Tuesday 29 November. This will be a hybrid event giving stakeholders the option to attend both in person and virtually.
The Town Hall will provide an opportunity to hear from our leaders, get the latest update from the programme and ask questions during a Q&A session.
Following the Town Hall, there will be an informal networking session for all in-person attendees with refreshments available and an opportunity to find out more about the joint transformation programme.
Unfortunately, registration for this event is now closed, however we will be publishing a recording of the event and the slides from the day on our webpage.
If you are interested in attending future TDC events and would like to be added to our mailing list, please contact TDCSecretariat@bankofengland.co.uk.