FCA and BoE announce proposals for data reforms across financial sector
The Financial Conduct Authority (FCA) and the Bank of England (BoE) today outlined their proposals for data reforms across the UK financial sector.
Both authorities have outlined their plans to develop their data and analytics capabilities. The FCA and BoE both depend on access to high-quality data to fulfil their respective missions of maintaining monetary and financial stability, market integrity, effective competition and consumer protection.
The FCA’s refreshed data strategy sets out a transformation plan to become a highly data-driven regulator. The strategy outlines the organisation’s increased focus on the use of advanced analytics and automation techniques to deepen its understanding of how markets function and allow the FCA to efficiently predict, monitor and respond to firm and market issues.
Alongside investment in new technology and increased use of external data, the FCA will pursue a broader transformation, investing in skills and new ways of working to enable it to better understand and use data and innovative technology.
The Bank of England has published a Discussion Paper (DP), Transforming data collection from the UK financial sector, to improve the timeliness and effectiveness of data collection from firms across the financial system.
The DP sets out the issues facing the current data collection system and identifies and explores a series of potential solutions, to prompt feedback from and further discussion with industry.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Advances in technology are changing the nature of the firms and markets we regulate. Our Data Strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change. In keeping with our Mission, a data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively.”
In addition, the FCA, the Bank of England and seven regulated firms have jointly published a Viability Assessment report on the latest Digital Regulatory Reporting (DRR) pilot.
DRR will potentially allow firms to automatically supply data requested by the regulators, thereby reducing the cost of collection, improving data quality and reducing the burden of data supply on the industry.
The document covers an assessment of the technological and economic factors that may impact a shift towards more automation in regulatory reporting.
Following this report, the Bank of England and FCA have committed to continue to work together to:
- Explore joint work on common data standards;
- Commission a joint review of the legal implications of writing reporting instructions as code;
- Commission a joint independent review of some of technical solutions explored as part of the Digital Regulatory Reporting (DRR) pilot, and
- Collaborate closely while engaging with industry and planning future phases.