Date of meeting: 2 February 2022
Minutes
Item 1 – Introduction
AM recapped the actions from the previous meeting (Secretariat to add RAG rating to future project milestone updates; FCA and industry participants to confirm they are content to be in scope of the legal disclaimer). He noted that a further action (TDC management to consider how to give the committee oversight on alpha prioritisation) is still outstanding and will be carried forward.
The minutes from the December meeting were approved.
Item 2 – Project Plan
AM presented a progress update. He explained that the project status is rated ‘Amber’, with progress made on solution design/testing and development of workstreams on scaling and measuring value. He noted that current risks include a lack of resource, specifically UX designers, and that the CRE use case is more open-ended, with more time needed to refine features.
Key discussion points/comments:
- KP asked if year-end timing has slowed the progress of the project. AM confirmed that holidays, illness and ‘people churn’ have all affected progress.
Item 3 – Role of Committees in prioritisation
AM explained the role of the committees in the prioritisation of solutions. He noted that the committees should decide to approve and recommend solutions to the Bank of England and FCA. They will then decide whether (and how) to implement the recommendations.
Key discussion points/comments:
- AT questioned what the role of the committees is after they have made a recommendation. He asked if there will be further engagement during implementation. AM confirmed that the programme ought to give updates to the committees, but that the programme had not yet decided the process.
- EM asked interested members to participate in planned working groups with the delivery teams, in order to offer specific feedback on the recommendations. She clarified that members don’t have to be SMEs to join the groups.
ACT: TDC Secretariat to clarify the role of the committees in the delivery process.
Item 4 – Form DQ update
EM gave an update on the progress of the Form DQ use case. The group has been working on design and testing of solutions: counterparty classification, Form DQ attribute definitions and improved communications between the regulator and industry. The team has paused work on two solutions (improving quality assurance and creating integrated datasets) due to the complexity of the design work and limited resource.
Key discussion points/comments:
- AT asked if there is flexibility on timelines, if work is not totally complete by March. AM explained that the group is constrained by a commitment to a deadline of mid-2023 for delivering value and change. He noted that most of the resource in the delivery groups is only committed until the end of March 2022. This may limit their ability to continue working past this date. CC added that if any elements are not taken forward, there would be opportunity for scaling in future use cases.
Item 5 – Financial Resilience Survey solutions
JC gave an overview of the FRS solution features. He presented the ‘firm view at a glance’ solution and demonstrated the prototype. The solution provides a firm with a comparison of its key reporting metrics against its peers. He asked members to comment on whether this feature would benefit firms and what barriers there would be to firms leveraging the report.
Key discussion points/comments:
Members agreed that this feature would be very beneficial to firms, but that the comparative data must be anonymised.
- EM asked whether this feature would apply to other future use cases. JC said that this is under consideration and there are many opportunities to scale up this solution. This will depend on the FCA’s appetite for sharing information such as the ‘sector view’ and that this wouldn’t be the same for every survey.
- RWS emphasised that it is important this reflect the FCA’s use of the data. He explained that although comparisons against sectors are useful, unless it explains FCA usage, then it is only reflecting back the data the firm has reported. He felt that although this may help with pre-submission review, there is little added value.
JC gave a demonstration of the Reghub portal, giving a single point of entry to different regulatory systems such as Connect and RegData. He also presented the new RegData homepage solution, which allows the FCA to share information with firms more easily.
Key discussion points/comments:
- Members were supportive of this solution and agreed that it would bring benefits to small and large firms. They requested that system permissions remain the same so that firm staff are only able to see data they could see under the current system.
- Members felt that regulators could scale this solution across other use cases (including for the Bank/PRA). AM confirmed that the Bank is open to this if it is feasible. He emphasised the importance of scaling opportunities across regulators.
Item 6 – Commercial Real Estate solutions
SH summarised the solution features and how they fit into the reporting process. She went into further detail around the ‘integrated future-proof data collection’ solution, which would reduce the burden of CRE data collection and broaden the report’s market coverage.
Key discussion points/comments:
- AT emphasised that regulators must clearly explain this solution to industry as broadening market coverage will increase costs for firms not currently in scope. MT pointed out that TDC aims to achieve a net total reduction in costs across a long-term timespan – a short-term increase in costs may be necessary for long-term savings.
MT presented the hypothetical benefits of the solution and asked members to comment on the four hypothesis statements.
Key discussion points/comments:
- Members generally agreed that collecting loan-level data instead of template reports is a good idea and that aggregation and governance work around reports increases burden. RP felt that such a change would raise issues for data quality. He explained that currently, firms can adjust aggregated data for known issues and they may lose the ability to do this with loan-level data. He added that providing industry average scores for data quality, as well as agreed tolerances, may help with this.
- SH explained that this use case also has opportunities for data standardisation. If we make data definitions complimentary to the definitions used for COREP and FINREP, we could align reporting later and switch those elements of collection off.
- MT explained that an integrated CRE collection would involve merging multiple data sets: STDF, Loan Book Data and CRE UR. The group would need to consider the reporting frequency when merging those, including the proportionality of requirements, with firms with higher systemic risk submitting more frequently.
- SL noted that standardising data from historic loans would be difficult, as firms would not have captured these in a way that could match new formats. He suggested that there should be tolerances around historical data to reduce burden.
MT presented four options for data collection - requiring all firms to report, requiring all PRA- and FCA-regulated firms to report, requiring regulated firms to report and incentivising voluntary submissions from others (e.g. through establishment of industry databases), or a voluntary collection. He added that he did not think the first or fourth options were feasible.
Key discussion points/comments:
- AT asked how much of reported CRE lending is by regulated entities. MT said that around 50% of lending is by regulated firms, and that there is considerable risk attached to the other 50% for which regulators cannot collect data, making the existing dataset sub-optimal.
- AT asked about the purpose of collecting additional data, since these are unregulated activities. MT explained that the Bank of England has the legal scope to investigate any cause of financial instability, but not the legal scope to mandate the reporting.
- Members felt that it is important to reduce barriers for firms to get involved in industry databases for example by allowing imperfect data and offering comparisons against the rest of the sector.
Item 7 – Role of the Reporting and Data Standards Transformation Board
AM gave an overview of the role of the Board. He explained that the board is advisory and should advise the programme on how to function effectively, engage with external initiatives, and select use cases for future phases. He clarified that it is outside of the scope of the board to directly oversee the programme’s work and comment on specific problems and solutions.
Item 8 – Phase 2 use cases
AM explained the timeline for selecting use cases for Phase 2 of the programme. He presented the longlist of potential BoE use cases for Phase 2. CC presented the equivalent use cases for the FCA.
AM presented the incident and OATP (Outsourcing and Third Party) reporting use case. The use case aims to standardise and automate the submission of incident and OATP reporting.
Key discussion points/comments:
- Members pointed out that this is a different class of data to that considered by the Phase 1 use cases. Some members felt that this could be an opportunity to look at something different; others felt the lack of synergies with the financial data the programme is currently analysing could result in missed scaling opportunities.
- Members discussed the trade-off between modernising existing reporting and implementing new reporting in a modern way. Some members felt that if regulators will introduce new collections (e.g. around ESG risks), then it makes sense to consider them in this programme and implement them strategically, and avoid future changes. Others preferred that the programme focus on modernising existing reporting.
CC presented the Retail Banking Business Model Data use case. He explained that the use case aims to introduce a centralised collection of data on retail business models.
Key discussion points / comments:
- AT asked if there are opportunities to consolidate with other collections for retail banking. CC explained that the scaling workstream ought to cover this.
- PT supported the idea of a retail use case but felt that it may be more beneficial to look at a more regular collection.
Item 9 – Forward agenda/AOB
AM presented the forward agenda for the next meeting and requested any other business.
- EM asked to add the request for Phase 2 resources to the forward agenda.
ACT: Secretariat to add discussion of Phase 2 resources to forward agenda.
Actions agreed in this meeting
- TDC Secretariat to clarify the role of the committees in the delivery process.
- TDC Secretariat to add discussion of Phase 2 resources to forward agenda.
Attendees
Miles Barker (MB), Credit Suisse
Chris Caldwell (CC), Financial Conduct Authority (Transformation Programme Lead)
Jonathan Clarke (JC), Financial Conduct Authority (TDC Project Manager)
Jacqueline Davies (JD), TSB Bank
Richard Dunne (RD), RSA Group
Rob Dunse (RD2), Lloyds Banking Group
Dayo Forster (DF), Bank of England (Product Owner)
Sharon Howells (SH), NatWest (TDC Project Manager)
Mark Hutchison (MH), Scotiabank
Mark Jones (MJ), Cambridge & Counties Bank
Sandy Leggeat (SL), Goldman Sachs
Elizabeth Maloney (EM), JP Morgan (TDC Project Manager)
Robert McBride (RM1), Lloyds Banking Group
Ruaidhri McInerney (RM2), Macquarie Group
Angus Moir (AM, chair), Bank of England (Transformation Programme Lead)
Derek Paine (DP), Mizuho International plc
Kamal Patel (KP), Barclays Group
Robert Pengelly (RP), Nationwide Building Society
Charles Resnick (CR), ClearBank
Angel Serrano (AS1), Santander
Aaron Shiret (AS2), Bank of England (TDC Secretariat / Data Standards)
Tammy Solomon (TS), Investec
Robert Thickett (RT), Building Societies Association
Paul Thirtle (PT), NatWest
Matthew Thompson (MT), Bank of England
Andrew Turvey (AT), Belmont Green
Martin Udy (MU), Bank of England (TDC External Engagement Lead)
Richard Walker-Smith (RWS), Bank of America
Robert Warren (RW1), Association of British Insurers (Alternate for Daniel Sadler)
Rebecca Whitwam (RW2), Bank of England (TDC Secretariat)
Apologies
Pardeep Bhatti, Metro Bank
Graham Cohen, BNY Mellon
Paul Burleton, BNY Mellon
David Palmer-Lewis, Principality Building Society
Daniel Sadler, Association of British Insurers
Simon Shapiro, HSBC