IBS Journal April 2016


approach taken with BCBS 239 gives some leeway in its interpretation and therefore the capacity to deliver real change. “Depending on the condition of the bank and its appetite to overhaul or revamp, they had a tremendous oppor- tunity,” he says. “Having said that it’s an enormous job to actually do what BCBS239 would ask you to do.” Regulators are broadly adopting the


approach that banks should be moving in the right direction continuously, rather than simply ticking the box to comply with regulations. For example, the UK’s Prudential Regulatory Authority warned in October 2015 with relation to stress testing that, “The bar on data quality expected of participating banks will be raised over time, in line with the Basel Committee on Banking Supervision ‘Principles for effective risk data aggregation and risk reporting’.” Awareness of the need to change and the capabilities on offer from new technol- ogies is also creating awareness amongst banks that data will be scrutinised more thoroughly than ever before. “Digital in financial services is giving a much deeper transparency,” says Rudi Collin, Head of Digital Transformation at BNP Paribas, Corporate and Institutional


Banking. “It is making information readily available, for free, to the client. That infor- mation is not only on others but on us. This puts a lot of pressure on banks to improve the quality of their service and it forces us to be more transversal. If you do not take care your bank could come across as being different entities in the market all of which have their own solutions. You have to have a unified internal picture of what you are doing.”


Making the change To overcome the siloed systems that exist within each firm, banks face a choice. Either develop a central data warehouses along the ‘golden source’ principle to use a single reference point for both finance and risk, or create a layer of data aggregation and nor- malisation that will provide a single view without changing the underlying data. “We have seen a handful of banks that had the unified view but many other banks approach is more piecemeal or doing things in silos or separately, so they get them done faster,” says Goldstein. Srikant Ganesan, Head of Risk Solu-


tions at specialist systems provider Risk Focus, notes that a strategic approach is taken where the leadership of the bank un- derstands its value. “We recently completed


a two-and-a-half year project for BCBS 239 on credit risk reporting,” he says. “Most of the big banks where the directive came directly from the CEO to do this properly. Whether a bank is systematically important plays a role in which approach they take.” Banks that are taking a strategic ap-


proach will be future-proofing themselves against any increasing demands for trans- parency, by creating an underlying data infrastructure that can be used to provide reports as and when necessary. “Using a façade over the top of the


existing data architecture is not a waste; it allows you to tactically satisfy the compli- ance requirement,” notes Ganesan. “You are going to have to go behind the scenes and fix what needs to be fixed.” However, firms that are able to build a


better view of their business, risk, and cash flows can also improve their commercial opportunities. “For example, being able to offer access to a finance in a matter of minutes because we already understand who a customer is, what he looks like,” says Sigurdardottir. “This is going to be confirmation that if you can harness the data, this can transform the way that we do banking, by making these decisions quickly, correctly and seamlessly.” Dan Barnes


© IBS Intelligence 2016


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