Our joint transformation programme
Central to our plan to deliver the reforms is our joint transformation programme. Work began in July 2021 to design and test solutions to address the issues we and industry face in today’s data collection process.
Alongside Bank of England and FCA staff, the programme comprises industry participants with a wide range of knowledge and experience, drawn from across the financial sector. In the first phase of the programme there were around one hundred participants working across the programme. Following a nominations process, participants were selected by us, alongside the FCA, in line with our selection criteria.
Phase two of the programme started on 22 September 2022. Nominations for phase two are now closed, however, there are still lots of opportunities for industry to get involved. If you would like to know more, please contact TDCSecretariat@bankofengland.co.uk.
The joint transformation programme is being run in line with the Government Digital Service’s industry-standard Service Design Approach (the SDA). This includes the use of Agile/Scrum project management techniques, and a focus on ‘human centric design’. We are running our programme in ‘Phases’ with each phase being made up of a number of use cases. Each use case will, in turn, pass through a ‘discovery and design’ stage, where we will explore issues and design solutions, and then an ‘implementation stage’ (Beta). A use case is a collection, set of collections or aspect of a data collection.
Phase one of the programme started in July 2021 with a ‘discovery and design’ stage for the phase one use cases. This stage ended in March 2022. The recommendations for the phase one use cases have now been taken through internal governance processes and the Bank and FCA’s responses have been published. An ‘implementation’ stage, to be largely conducted outside the joint transformation programme, will run from September 2022 until Q2 2023.
Phase two of the programme, which will focus on four new use cases, began on 22 September 2022 and will run in parallel with the phase one implementation stage.
There are four use cases in scope for phase two:
Incident, Outsourcing and Third Party reporting (OATP)
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.
Commercial Real Estate (CRE) database
A phase one use case, getting hold of good quality commercial real estate data is crucial for the Bank's ability to monitor prudential risk in the financial sector. Work on the use case during phase one confirmed our initial hypothesis about CRE data: it’s crucially important data, but the current data we get is a poor fit for our needs, fragmented, and burdensome to collect. We think completing the design of an integrated ‘transformed’ commercial real estate collection is a critical stepping stone to the delivery of future use cases, for instance a consolidated loan collection.
Review Prudential Data Collection
For a prudential regulator, the prudential data the PRA and FCA get from firms is typically some of the most important data they receive. High level capital, liquidity, balance sheet and profitability metrics are a key indicator for how close a firm is to failure. On the flipside, these metrics are some of the most costly for firms to produce. We therefore think improving collection of prudential data will be critical for Transforming Data Collection (TDC) to be successful, with lots of opportunities to deliver value to firms and regulators. We think this use case, looking at prudential data collections from solo regulated firms, will inform potential future work looking at prudential data from dual regulated firms.
Retail Banking Business Model Data
The FCA currently collect detailed product-level financial data across the 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. But the data is currently collected ‘ad-hoc’, and hasn’t been designed in an integrated way to best meet the needs of all of the users of the data. The FCA want to move the collection 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 us to explore the extent to which business model data can be standardised within a tight scope of relatively homogenous firms.
Initially the joint transformation programme had planned to have five use cases for phase two. Due to a lack of resources, the decision was taken to reduce the scope of the Asset Reporting for Insurers use case and to focus on the insurers CRE assets. This work will now be part of the CRE use case.
There were three use cases in scope for phase one:
Quarterly statistical derivatives (DQ) return
The quarterly derivatives returns, submitted by 20-odd firms with liabilities over £10billion, summarise marked-to-market valuations of derivative positions at the end of each quarter. The data are primarily used by the ONS for national balance of payments statistics.
Commercial real estate (CRE) database
Please see description of the CRE use case above.
Financial resilience survey (FCA use case)
In June 2020, the FCA commenced a regular quarterly financial resilience survey for solo-regulated firms. This use case will focus on opportunities to improve data quality, increase transparency about how the data is analysed, and consider how to transition the survey into RegData.
Earlier this year, the joint transformation programme made seven recommendations to the Bank and the FCA as a result of the work carried out during phase one. The recommendations are aimed to target a selection of issues that were identified for the Quarterly derivatives statistical return ‘Form DQ’ and the Financial Resilience Survey (FRS) use cases. The recommendations and the Bank and FCA’s response to the recommendations were published in July 2022.
A critical part of the resource we need for the programme to be successful is industry resource. If you would like to or are interested in, providing resource for the programme, please contact TDCSecretariat@bankofengland.co.uk
Committees and delivery groups
In order to work effectively with industry, the Bank and FCA have established a governance and delivery framework for the joint transformation programme.
The work of the programme is carried out by two delivery groups: a Core Delivery Team and the Advisory Group. The programme is overseen by two committees: the Reporting Transformation Committee and the Data Standards Committee.
A high level overview of the role of each of the committees and delivery groups, along with information about members (where appropriate), and participating firms can be found below. Further information on the role of the groups can be found in the Terms of Reference for the Governance and Delivery Groups.
A list of participants, minutes of the committees, committee packs and any output created and published by the joint transformation programme will be published.
Third party suppliers to reporting firms will also be asked to contribute to the programme by way of workshops and request for input processes. If you are interested being involved in these and are not already on our mailing list please contact TDCSecretariat@bankofengland.co.uk.
Reporting Transformation Committee
The Reporting Transformation Committee focuses on overseeing the design of solutions for parts of the reporting process where the Bank, FCA and reporting firms interact directly. This will cover aspects of modernising reporting instructions and creating a better integrated end-to-end reporting process.
The committee meets monthly in a mix of formal committee meetings and knowledge workshops. The minutes from each formal committee meeting are published.