I have just returned from what is becoming a regular trip to Kuwait after also meeting with man\y banks in Abu Dhabi and Dubai. Meetings with many of the banks has highlighted the increasing burden of regulatory reporting driven by a zealous Central Bank and imminent new Basel lll requirements.
This month there have been statements and white papers from Central Banks in the region to notify that to ensure sound banking practices are enforced.
the regulations will get tougher as the year progresses
The need for comprehensive Regulatory Capital Compliance in the Middle East is similarly seen in KSA where an implementation date for Basel iii was announced as long back as January 1 2013, with its regulated banks due to report under Basel iii in due course.
This change in the regulatory landscape, together with its ambitious commercial
strategy and wish to become internal ratings-based (iRB) compliant, challenges the way banks manage regulatory capital data, and the capital calculations.
Over the last 6 months it is evident that banks are increasingly aware that for regulatory reporting. the current largely manual compliance and reporting processes need to be automated, to enhance the timeliness, efficiency and accuracy of regulatory capital calculations and regulatory reports.
Part of the challenge is that core banking systems were not designed to generate such returns. Data is typically spread across multiple back office systems and spreadsheets. Another challenge is that banks that operate internationally may need to report the same data to multiple regulatory authorities in different reporting templates. Central banks are also looking to automate their own regulatory reporting efficiency and there is a gradual move to digital reporting e.g. via XBRL format.
Enterprise Data Consolidation into a central data platform is the key to streamlined and accurate regulatory capital compliance and reporting. Standard Microsoft SQL technologies such as SSAS, SSIS, and SSRs can then manage the ETL process and data validation and aggregation. Risk and other calculation engines with built-in calculations for Basel ii and Basel lll compliance provide a single platform for reporting. The required data can then be surfaced from underlying data cubes into specific central bank formats, typically in Excel.
It is not efficient for each bank to have to study complex regulations and to each develop the same report, in discrete systems that are individually maintained. Banks need a productized, out-of-the-box solution ,which embodies: approvals, audit trails, and kpi dashboards, and industry standard security, built on a standard configurable framework. This provides a common platform for support, and makes it much easier to introduce report modifications and even new reporting requirements.
Central bank regulatory requirements are essentially the same globally and reflect international compliance to accords like Basel ll and FATCA, COREP and FINREP etc. This means the underlying data model can also be common, though local calculations and report output formats. With a common model , report format changes can be incorporated by the software author to the benefit of all. This not only reduces the cost, time and risks of implementing a regulatory compliance solution but also the ongoing maintenance and the need to incorporate new reporting requirements.
in addition to streamlining compliance, automating regulatory capital management helps to augment overall business management. The underlying data warehouse can also be used to create internal MIS reports. Consolidated regulatory capital data allows a bank to fully reconcile its risks with its balance sheet. This single version of the truth enables the bank’s senior management to understand its risks, and to ensure the bank is properly capitalized to meet the needs of both the regulator and the business.
An SSAS data warehouse allow powerful data ‘drill down’ to understand the breadth and depth of the risks that banks manage and how these change over time. Managers are fully informed, to take risk-based decisions, based on the bank’s business strategy.
BRSAnalytics is a purpose built solution for regulatory compliance and management control. It is not a BI tool that has been adapted. It is a purpose built solution that embeds regulatory knowledge and is built on industry standard technology. Such a system helps a bank’s directors to meet their personal Corporate governance obligations. it provides key stakeholders and management a comprehensive toolset to manage its risks, its capital and its business strategy.
The solution is proven over the last 7 years with 100% implementation success.
“By automating the process of data gathering, it has significantly reduced time spent on otherwise unnecessary internal regulatory computation maintenance.”
Alan Bartoli, ICT & Operations Officer (Izola Bank plc)
“In holding in-depth discussions regarding BRSANALYTICS, it was evident that the solution was well thought out and backed by a knowledgeable implementation team with the necessary expertise to cater for our regulatory needs. The simple fact that it condenses all the data to produce one single accurate report made it the obvious choice in treating this monthly burden with confidence and efficiency.”
Anthony Schembri, Managing Director (Raiffeisen Bank)
Ask for a copy of the Fimbank Case Study:
“…providing a wealth of functionality such as drill-downs”
“…enable business users to analyse and respond to regulators’ queries”
“…Drastic Reduction of Data Collation and Verification Time”
“…the Bank has been able to dramatically reduce the time it took to prepare regulatory reports by at least gaining 75% efficiency”
“…now, we are able to do the same process in a fraction of the time. This is remarkable”
“…This has given its members the time to focus on primarily ensuring a more qualitative output and submission to Regulators”
“…I’m very happy to say that because of BRSANALYTICS, we have achieved this goal”
“…deploying the solution has proven to be a game changer”
“…we are now able to focus on other important assignments”
“…gain better insight on our financial activities, be more productive and improve our decision making due to the use of business analytics”