BFC Bulletins Monthly News Digest
Tags Compliance RegTech
For several years, the Bank of Russia has been preparing financial institutions in Russia for a transition to a data-centric reporting model, pressing them to improve data collection and approaches to reporting. To accomplish this, it is important that financial institutions in the country develop an adequate IT base, one that will allow them to quickly prepare large volumes of primary credentials and ensure their quality and analytic value. The creation of data warehouses was originally envisaged to accomplish this as they allow both the regulator and individual financial institutions to control and ensure data quality, coordinate data, detect and correct errors, enrich data with detailed analytics and easily adapt to new regulatory requirements.
Now however, some are calling for an architectural approach referred to as “ABS showcase reporting”. Under such an approach, financial institutions simply upload data in its rawest form, with indifference to quality checks, errors and other data standards. Although this approach has many issues, including a high potential for inaccuracy, incompatible data between various institutions and a large degree of overall data fragmentation, this approach is faster, cheaper and easier for financial institutions to implement. This means that they can more quickly fulfill regulatory data transmission requirements. This also places a heavy burden on the regulator to transform data into usable information. Although it is understandable that financial institutions would desire this easier and cheaper way of fulfilling regulatory requirements, a data-centric model is a more appropriate solution, not only for the regulatory but also for the long-term health and sustainability of financial institutions themselves.
