IBS Journal April 2016


Greater data boom under BCBS 239


“Regulations are an enabler for Big Data delivery,” says Sigga Sigurdardottir, Head of Innovation at Santander. “In terms of leveraging and understanding customer data and the ability to truly understand the customer, this is going to open tremendous opportunities for us to handle the data in the right way.”


In its June 2015 report, ‘A marathon, not a sprint’, consultancy McKinsey reported 72% of global systemically important banks (G-SIBs) and 0% of domestic systemically important banks (D-SIBs) expected to meet the G-SIB mandated deadline of January 2016 for BCBS 239, the framework for delivering a single view of risk and finance data. The majority of D-SIBs – 57% – thought they would become compliant during 2016. BCBS 239 ‘Principles for effective risk


data aggregation and risk reporting’ was set out in January 2013 and requires that: • Risk data should be reconciled with


bank’s sources, including accounting data where appropriate, to ensure that the risk data is accurate


• A bank should strive towards a single


authoritative source for risk data per each type of risk As a regulation, it has profound oper-


ational consequences, stretching beyond the risk and finance functions. Firstly it is making costly demands of already stretched banking IT budgets – McKinsey estimates that a significant investment in business-enabling analytics would require a budget of $100-150 million, if a bank were to derive the greatest benefit from the project. Secondly, the operational efficien- cy of a single view for risk and finance data


34 © IBS Intelligence 2016 www.ibsintelligence.com


can be leveraged to deliver growth beyond the regulation, a concept often mooted for regulation, but rarely delivered upon. Marion Leslie, Managing Director of


Pricing & Reference Services at Thomson Reuters, says, “The operations teams in banks have long advocated an enterprise data architecture to share data across the firm which would not only reduce the number of transactions across the firm but also reducing costs and making better use of the content.”


Pressure to reform Weighing against this change has been the size of the task. Siloes of data have devel- oped within banks, separated by product and business lines. Despite the value that can be gained by more effective risk and cost oversight, the scale of the projects have often been daunting. In some cases banks have encouraged teams to compete with one another, for example Deutsche Bank CEO, John Cryan, reported that had historically been the case within his firm. Banks that have adopted these models will have had a limited capacity to develop a strategic architecture. Steven Goldstein, Chairman and Chief


Executive Officer at Alacra, which spe- cialises in business information workflow technology, notes that the principles-based


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