ECB advances IReF to realisation phase, creating a clear mandate to modernize

Key challenges for banks on the road to IReF 

The transition to a granular, model-driven framework remains a significant undertaking. And, financial institutions still face critical challenges:

• Managing data volume & complexity: IReF will require banks to move from aggregated template-based reporting toward granular, source-level data. That will result in an exponential increase in data volume and complexity, creating a fundamental change in how data is viewed – from limited queries like "How many loans of a certain type do we have?" to comprehensive dives into the full history, counterparty details, performing status, and associated collateral for every single loan on the bank’s books. A single aggregated value in one report could be replaced by millions of individual data records in IReF. Legacy systems, designed to handle a few thousand data points, were simply not designed for this data explosion.
• Ensuring scalable reporting infrastructure: The sheer volume of granular data will overwhelm legacy reporting infrastructure. Systems built for predictable, batch-oriented workloads will collapse under the demands of processing, validating, and submitting terabytes of data within tight reporting windows, creating significant operational risk and a high likelihood of missed deadlines. A highly scalable and performant technical infrastructure is no longer an advantage but a prerequisite for compliance.
• Automated data quality and governance: In a granular world, data quality is paramount, and the old methods of governance are no longer viable. Manually checking a final report with thousands of data points is already difficult; manually verifying millions of source-level records is impossible. The focus must shift from reactive, post-submission reconciliation to proactive, automated governance at the point of data ingestion. Ensuring accuracy, consistency, and full traceability for every single data element requires a system of intelligent, automated controls that can operate at a scale far beyond human capacity.

Preparing for the future of granular data reporting

The ECB’s decision to advance IReF to the realisation phase means the work ahead is too foundational to defer. This is a rare mandate to re-architect legacy data ecosystems, eliminate long-standing inefficiencies, and transform regulatory reporting from a cost center into a source of genuine institutional insight. The scale of that work means it cannot wait.

IReF readiness will depend on decisions institutions make now: how they standardize regulatory data, modernize reporting infrastructure, automate controls, and prepare for a more intelligent reporting lifecycle. Banks that use this period before the final timeline is published will be better positioned not only to meet the ECB’s requirements but also to build a more resilient, scalable, and insight-driven reporting function for the next era of regulatory change.