The Basel Committee found that many banks were non-compliant with its data and reporting principles or faced data aggregation challenges. It called for significantly upgrades to bank systems and governance arrangements to improve risk data quality, completeness and timeliness.
The banks must also be prepared for new and unforeseeable risks in data privacy and cybercrime, potential violation of conflicting national laws and the need to manage escalating volumes of data.
What are the banks doing?
- To meet the Basel principles, banks must review the quality and aggregation of their risk data, enhance governance procedures, and streamline processes. Such data and reporting improvement programs could be large and costly as banks race to make regulator deadlines.
- Banks realize the need to better exploit existing data to understand customer needs and serve them effectively and profitably.
- Banks see the potential to harness data sources to streamline their operations, build better defences and industrialize processes, however they are currently constrained by aging, disparate legacy systems and steep IT costs.
What is the impact on customers?
- Enhanced data collection and analysis by banks can benefit customers through service enhancements and also elevate investor disclosure. However the upfront costs of systems changes will be borne by customers and shareholders.
Review this section (PDF 2.87 MB) for an overview of banks’ intricate new reporting requirements, their progress to-date in adapting to the global principles and key activities to capture and extract value from the data.