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With transformation sweeping through the financial sector, institutions are more aware than ever before of the importance of granular data to enable a digital lingua franca for financial regulation and to handle the exponential increase in data. Granular data facilitates this by breaking data down into the finest, most detailed level that is practical to use. Breaking the data down to its smallest components is called disaggregation.
With greater demands for transparency, financial institutions in the APAC region are turning to innovative concepts and different systems to keep up with data requests at increasing frequencies, while supplying full traceability of submissions. Most now see high-quality, granular data as a new standard towards transparency and data-driven insights.
To comply with evolving mandates issued by regulators across the APAC region, financial institutions must submit transactional/record level data as granular and disaggregated. The data needs to conform to data models specified by regulators.
Most regulatory data flows happen in a manual, template-based fashion. Financial institutions can benefit from economies of scale by rethinking the data flow process, including at granular level, and investigating how data is created, exchanged and analysed between financial institution experts and regulatory bodies.
A lack of common standards in data models and processing logic is currently a roadblock and a financial burden on most organisations. The cost burden on financial institutions could be significantly decreased if data was requested only once in a granular, standardised and structured process. The use of updated frameworks and technologies is key in combatting the high cost of regulation and reporting.
By enabling a digital lingua franca for financial regulation, granular data provides a range of benefits for financial services organisations. They include:
To get a clearer view of how granular data can be utilised by regulatory bodies in the APAC region, we can look at two cases: APRA Connect in Australia and MAS 610 in Singapore.
In 2021, the Australian Prudential Regulatory Authority (APRA) launched its new reporting solution, APRA Connect, as part of a shift toward standardised, machine-readable data models and away from aggregate to granular requests.
The new reporting system went live with over 4,500 financial reporting entities. Data models are broader and more granular for the new collections, allowing APRA and its partners to fulfil a multitude of data needs. New capabilities in granular data help APRA supervisors to drill deeper into trends and to discover underlying causes of risks building in the system without having to go back to ask regulated entities for more information.
Financial institutions use automation to submit high-quality, granular data in a matter of hours instead of days. In parallel with granular data, automation helps to identify potential risks, ensure compliance and saves time and money.
Sean Carmody from APRA says:
“It is a significant milestone for us. It will give us more flexibility. We can collect more granular detailed data than we can use in the existing system. It gives us more insight and the ability to be more forward-looking. We can develop new tools to put in the hands of supervisors.”
In 2018, the Monetary Authority of Singapore announced changes to regulatory reporting. It introduced new data collection requirements that mandated banks to file their core set of data to MAS requirements, a far more granular level than before.
The revised MAS 610 requirements, as they are known, apply to all banks in Singapore, including foreign-owned entities. Revised MAS 610 collects more granular data of banks’ assets and liabilities by currency, country and industry. There are approximately 7,700 unique measures or data points to be reported across 45 different dimensions. Banks need to submit information at both individual and group level, as well as report separately for their Singapore operations, overseas bank subsidiaries and overseas banks.
“Regulators are moving to standardised, machine-readable data models and from aggregate to granular requests. It is no longer enough to simply submit data on time, your data must be explainable and high-quality,” says Joanne Horgan, Chief Innovation Officer.
In Australia, our APRA Connect regulatory reporting solution eliminates manual effort with automatic conversion of excel data into an APRA-ready submission file. The solution is fast and scalable and can be up and running in as little as four weeks. With automatic system updates, institutions can be confident that they are coordinated with always updating APRA Connect templates.
Our API-powered platform for regulatory reporting uses the same technology and rule engines as APRA, providing instant updates and APRA-ready submission files, ensuring compliance with the regulator.
In Singapore, the regulatory reporting technology uses our Reporting API to automatically update published machine-readable regulatory rules and data models directly from the regulator’s system. Today, the solution is in use by more than 30 financial institutions in the state.
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