Financial Services Ireland

BCBS 239: Slow and steady progress

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Since its publication in 2013, banks have faced ongoing challenges around the adoption of the Basel Committee on Banking Supervision’s (BCBS) standard 239 for effective risk data aggregation and risk reporting.

While the BCBS 239 principles aim to strengthen banks’ data governance frameworks and improve their risk management, decision-making processes and risk reporting capabilities, particularly in a time of stress, the quest for ‘full compliance’ has proved difficult.

Despite considerable effort and improvements, many banks continue to struggle with the principles. This is in the context of the extension of scope of principles across other data sets to include regulatory reporting, financial reporting and recovery planning. Many banks are looking at their implementation programmes to assess the sustainability of their proposed solutions. The most recent progress report on banks’ implementation of the principles was published by the Basel Committee just as the economic impact of Covid-19 on financial institutions was emerging.

Looking at the crisis through a BCBS 239 lens, it represents a true test of a bank’s ability to report accurate data to both regulators, senior management and boards in a timely and accurate manner while ensuring sufficient adaptability to respond to emerging scenarios. This real life ‘fire-drill’ is likely to represent a unique opportunity for regulators to assess banks’ ability to report in a time of stress. Banks should take this opportunity to proactively self-assess their own reporting capability during this time and, where appropriate, take the necessary steps to address any shortcomings identified.

In our latest paper, which you can download below, we explore the emerging themes and summarise the key findings arising from the progress report. While the compliance journey is far from complete, with difficulties identified in the area of Data Architecture and IT Infrastructure, there has been tangible progress in other key areas.

Don’t hesitate to reach out if you have a question.

Dermot Keegan

FS Partner, CFO Advisory
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