Our experience with firms who have previously undergone a Common Reporting (COREP) (or similar regulatory reporting) transformation tell us that the key challenges adopters are likely to face relate to:
- Speed: handling the timelines for preparing the relevant reports at a high frequency
- Data quality: gathering a deep understanding of both the regulations as well as the firm’s data characteristics
- Data availability: ensuring availability and integrity of data from source systems and ability to aggregate according to prescribed definitions
- Data handling: solving the challenge of combining data to provide the requested perspective
- Scrutiny: minimizing the impact of increased scrutiny by internal and external stakeholders
- Skills and resources: effectively aligning topic experts from Finance, IT, risk, front-office and regulatory policy
- Governance: implementing methods for appropriate ownership of data, processes and reports
- Other initiatives: maximising flexibility to deal with ongoing developments.
The implementation of COREP is a cross-disciplinary undertaking which requires adequate, careful and efficient decision taking. KPMG’s extensive industry experience has highlighted the importance of considering the implementation as a multi-disciplinary project rather than a tactical, segregated, departmental task. Key considerations in such a transformation project include:
1. Timely understanding of readiness
Determine whether people, processes and systems are ready to provide correct and timely capital adequacy figures in the new COREP format. This involves assessing data availability given the organisation’s specific products and methodologies. Subsequently performing an issue and impact analysis provides a level of comfort around existing and new reporting challenges.
2. Effective implementation and project management
A correct implementation of an efficient regulatory reporting framework within challenging timelines requires a sufficient capacity of skilled people. A carefully considered design and implementation of new reporting solutions based on industry experience offers a reporting process that is sustainable, accurate and efficient. This requires specialised, cross-functional topic advisors to support the interpretation of requirements for both capital calculations and reporting.
3. Robust testing and review
The firm should find a method to assure that the highly granular information which is reported to the supervisor is complete and accurate. A review over the accuracy and completeness of reported items provides comfort over whether returns are in line with regulatory reporting requirements.
4. Sufficient stakeholder management
The new framework and supervisory requirements demand closer involvement for a wider group of stakeholders. Ensuring that stakeholders received sufficient training helps to increase the level of quality and control over reported figures.
KPMG can support you on each step of this challenging process in order to get COREP ready.
We are also able to provide you with KPMG’s dedicated software solution, K-Helix