Transforming data collection communication to firms – 13 April 2022

Joint transformation programme: update and achievements since February 2022

The Bank of England (BoE) and the Financial Conduct Authority (FCA) are working to transform data collection from the UK financial sector. A lot of this work is being carried out by the joint transformation programme we have set up with industry. In this publication we are providing an update on the joint transformation programme, and what has happened since our last communication in February 2022.

Key takeaways

 Phase One

• The phase one ‘discovery and design’ stage ended at the end of March 2022. We would like to thank everyone who contributed to working on phase one over the last nine months. In particular, we would like to thank the programme team, who have delivered a huge amount in difficult circumstances.
• We are no longer extending the ‘discovery and design’ stage for the CRE use case until the end of May due to a lack of resource. Instead we will be continuing work on CRE as part of phase two of the programme (see section on phase two use case selection), and as part of our ‘phase one scaling sprint’.
• The programme team are focusing their effort on de-risking our transformation journey (see section on ‘phase one scaling sprint’). This work will take place before we launch into the next ‘discovery and design stage’ for phase two use cases - from April to end of June 2022. In July and August 2022 we will be planning phase two of the programme.
• Alongside the scaling sprint, the programme team are finalising the recommendations based on the phase one ‘discovery and design’ stage. These recommendations will inform the Bank, FCA and other industry stakeholders what the programme thinks should happen next with the work done so far. The Bank and FCA’s response to those recommendations will clarify how the Bank and FCA will meet its commitment to deliver the first valuable change for phase one use cases by July 2023. We expect to publish the recommendations, and the Bank and FCA’s response to the recommendations in July 2022.

 Phase two

• We are pushing back the start of phase two of the joint transformation programme until September 2022. We previously said it would start in June 2022.
• We have selected our phase two use cases, subject to resource availability. They are:
  • Commercial Real Estate (CRE) data,
  • Retail Banking Business Model data,
  • Incident, Outsourcing and Third Party reporting,
  • Strategic review of prudential data collections from solo regulated firms, and
  • Asset reporting for insurers.
• We would like firms to provide additional resource to phase two of the programme. Including the resource who we currently have in the programme, we are looking for around 20 FTE from firms to be part of the core delivery team from September 2022 until the end of May 2023. Additional industry resource will work alongside an expanded Bank of England and FCA team.
• The nominations for the phase two process opens on 27 April 2022. Nominations for committee members will close on 22 June 2022. Nominations for delivery and TDC Advisory Group members will close when we reach our resource limit for the delivery team.

You can find out more about the joint transformation programme and the work it is carrying out on the Transforming Data Collection webpage.

Overview of phase one ‘discovery and design’ achievements and next steps

We completed the ‘discovery and design’ stage for our phase one use cases at the end of March. During the nine months working across three use cases the programme team have:

• identified 29 problem statements that describe the issues users commonly face with the current data collection process,
• proposed 16 features that describe how some of those problem statement may be addressed for the phase one use cases, and
• designed and evaluated 11 prototypes that show what a user might see or do for a particular feature in future.

For our quarterly statistical derivative and financial resilience survey use cases, the programme team are finalising the recommendations. The recommendations set out what the programme think the Bank of England, FCA and firms should do with the designs and work carried out during ‘discovery and design’. We expect the recommendations approved by the Reporting Transformation Committee, or Data Standards Committee will be published in July 2022.

At the same time as we publish our recommendations, the Bank of England and FCA will publicly respond to the recommendations made by the programme. Our recommendation response will outline:

• which recommendations we are taking forward and when, and
• which recommendations we are not taking forward and why.

Over April and May, the team will be asking committee members and other industry parties to comment on the recommendations. If you would like to review the draft recommendations please write to TDCSecretariat@bankofengland.co.uk.

‘Phase one scaling sprint’ and phase two planning

As we announced in February, before we start work on our phase two use cases, we would like to spend time capturing lessons learnt from our first iteration of use cases, and getting ready for future phases.

Phase one scaling sprint

We are currently developing a work plan, which we are calling our ‘phase one scaling sprint'. Running from now until June 2022 the scaling sprint will focus on:

• Identifying scaling opportunities and tweaking phase one solution designs, in order to maximise value of the work done in phase one.
• Identifying and alleviating blockers and critical risks or issues that may harm our work to Transform Data Collection, either in the next or future phases. This plan may include things to work on that have a long lead time to fix, designing particularly complex solutions, and working through issues we are seeing with the programme’s own operating model.
• Iterating the business case and narrative for Transforming Data Collection as a whole.

Phase two planning

From July to September 2022 plan the goals, activities and deliverables for phase two of the programme.

Phase two update

We are planning to start phase two of Transforming Data Collection in September 2022. Phase two will start with a nine month ‘discovery and design’ stage for five new use cases (see announcement of phase two use cases) that will be carried out by the joint transformation programme.

Announcement of phase two uses cases

Phase two use case list

Subject to resource availability, the use cases the Bank of England and FCA have chosen for phase two of Transforming Data Collection are:

• Commercial Real Estate data. A phase one use case, getting hold of good quality commercial real estate data is crucial for the Bank's ability to monitor prudential risk in the financial sector. Work on the use case during phase one confirmed our initial hypothesis about CRE data: it’s crucially important data, but the current data we get is a poor fit for our needs, fragmented, and burdensome to collect. We think completing the design of an integrated ‘transformed’ commercial real estate collection is a critical stepping stone to the delivery of future use cases, for instance a consolidated loan collection.
• Retail Banking Business Model data. The FCA currently collect detailed product-level financial data across the range of retail banking products and segments. The data is critical to support the FCA’s competition objective and is reused by a variety of other stakeholders across the FCA. But the data is currently collected ‘ad-hoc’, and hasn’t been designed in an integrated way to best meet the needs of all of the users of the data. The FCA want to move the collection to a regular collection, and design a new integrated collection that minimises burden on firms. Further, designing the ‘retail banking business model’ implementation as part of TDC will allow us to explore the extent to which business model data can be standardised within a tight scope of relatively homogenous firms.
• Incident, Outsourcing and Third Party reporting. Ensuring the operational resilience of the financial sector is a key priority for the Bank of England, PRA and FCA. However, operational resilience is currently an area where the regulators lack high quality consistent data. Policy makers are considering the development of new incident, outsourcing and third party reporting policies. You can find more information about the operational resilience policy on PS6/21 | CP29/19 | DP1/18 Operational Resilience: Impact tolerances for important business services. By considering the design of this reporting policy as part of the joint transformation programme, we can help ensure this critical data is delivered in a way that minimises the impact on firms. At the same time, we think the use case will provide a chance to explore how best to deliver ‘event’ driven collections, where a new report is triggered when a given event occurs.
• Strategic review of prudential data collections from solo regulated firms. For a prudential regulator, the prudential data the PRA and FCA get from firms is typically some of the most important data they receive. High level capital, liquidity, balance sheet and profitability metrics are a key indicator for how close a firm is to failure. On the flipside, these metrics are some of the most costly for firms to produce. We therefore think improving collection of prudential data will be critical for Transforming Data Collection to be successful, with lots of opportunities to deliver value to firms and regulators. We think this use case, looking at prudential data collections from solo regulated firms, will inform potential future work looking at prudential data from dual regulated firms (see sub-section on longer term use case roadmap development).
• Asset reporting for insurers. The scope of the Transforming Data Collection covers all reporting including from insurance firms. The asset reporting for insurers (S.06 in Solvency II reporting) was the only insurance focused use case put forward for phase one or two. It’s the use case the insurance industry itself chose because the data is a) recognised as important and useful to the Bank b) but firms say it's costly to report. Apart from its potential for a lot of value delivery, the transforming data collection teams at the Bank and FCA liked it due to possible integration opportunities with other non-insurance data collections.

Caveats and clarifications

• Use cases have been selected subject to resource availability. In the event that we don’t believe we can get sufficient industry resource to deliver a use case as part of the programme, we will drop that use case from the phase.
• For use cases based on existing reports, such as Commercial Real Estate, the exact list of existing reports or data points to be included in the scope of the use case is still being agreed with business owners of those reports within the Bank and FCA.

How use cases were selected

The transforming data collection teams at the Bank and FCA first compiled a long list of use cases. To do so, they gave internal Bank and FCA business areas and industry the opportunity to nominate use cases.

Both internal Bank and FCA stakeholders, and industry via the Reporting Transformation Committee, provided feedback on the use case long list.

The transforming data collection teams analysed the use case long list in line with a set of selection principles agreed by the Reporting and Data Standards Transformation Board, taking into account the priorities and feedback provided by industry.

The use case selection decision was ultimately made by Gareth Ramsay (Executive director and Chief Data Officer, Bank of England) and Ian Phoenix (Director of Intelligence and Digital, FCA). 

The following principles were ultimately critical in the selection of phase two use cases:

• Strong internal alignment with business plans and priorities of relevant areas within the Bank and FCA. This meant there were some use cases on the short list that industry prioritised, but that we did not feel we could tackle in phase two. We do expect these use cases to be tackled as part of Transforming Data Collection in the near future.
• Across the portfolio, aiming a balance between use cases that have scope to deliver genuine transformative change, with the potential to ease delivery risks for future bigger scale changes, while at the same time ensuring there are opportunities for delivery of some continuous value.

Longer term use case roadmap development

We recognise and agree with industry’s demand for greater clarity on the longer term roadmap that describes what use cases and legacy reports will be tackled when.

We are working with colleagues across the Bank to ensure that the TDC roadmap is aligned with any future review and reform of banking reporting requirements.

If you have any questions about the use case selection process or would like to find out more, please contact TDCSecretariat@bankofengland.co.uk

Phase two resourcing needs

From September to May 2023, the joint transformation programme will carry out a ‘discovery and design’ stage for our phase two use cases (see announcement of phase two use cases sub-section). To enable us to continue with our ‘discovery and design’ work for new use cases, as well as scaling solutions from our phase one use cases, we will be asking firms for similar types of resource to play similar roles as in the first phase.

Governance committees

We are asking for nominations for members to join the Reporting Transformation Committee and Data Standards Committee for phase two of the programme. The committees play a crucial role in overseeing the work of the programme, managing risks and issues, and ultimately recommending designs developed by the programme to the Bank, FCA and industry. The role of the committees will be described in detail by an updated terms of reference to be published on 27 May 2022.

Delivery team

We are looking for industry to provide twice the levels and types of resource to the delivery teams as they do currently – around 19-26 FTE for the delivery team (excluding technical and subject matter experts). These FTE will focus on discovery and design for current use cases, as well as working to scale current and future designs to maximise their value. We expect the majority of delivery team members to be seconded to the programme for four days a week. However, we will consider nominations to participate part time in the programme for a minimum of one day a week, particularly for roles providing specific technical or subject matter expertise. The key roles and skills sets we require are (FTE in brackets):

• Design lead (1 - 3),
• Delivery managers (3 - 4),
• Business analysts and lead business analysts (11 - 13),
• Developers (2 - 3),
• Service designer (1 - 2),
• Technology strategist (1), and
• Technical and subject matter experts including: architects, data management specialists, data architects, use case subject matter experts (8 - 12 individuals).

If you, or your firm, would like to nominate someone to be part of the delivery team, the nominations process will be open from 27 April 2022. Details on how to submit a nomination will be available on our webpage once the nominations process has opened.

Transforming Data Collection Advisory Group ('TAG')

In addition to the delivery team, we are also looking for a number of individuals to form part of the ‘Transforming Data Collection Advisory Group’ ('TAG').

TAG members will play a passive, yet critical role in the programme’s work.

They will make themselves available to participate in discovery interviews and workshops. During these sessions they will provide valuable insight about their role in the reporting process, and the issues they face on a day-to-day basis.

Later, once the team has designed solutions that aim to address the issues they currently face, we would like TAG members to participate in testing those designs. During solution testing TAG members will help the delivery team to get a sense of how the designs can be improved, and what value they might add to their prospective users.

Finally, TAG members will have better access to what’s happening in the programme as it progresses than those outside the programme. They will have access to the materials being developed by the programme and will be invited to regular programme show and tells.

Why get involved?

“This is a truly unique programme in terms of its approach. The best example of a real private/public collaboration I have seen globally in 20 years of working in financial services.”

Lee Fulmer - Chief Data Officer, UBS Investment Bank and Chairperson of the Reporting and Data Standards Transformation Board

The joint transformation programme provides a unique opportunity for firms and regulators to work collaboratively, to design and build a better reporting process, and shape the future of data collections. We think working together in an open, collaborative and transparent way like this enables the widest possible set of views to get the best solutions to the issues we are tackling.

For participants, being a part of the programme is a valuable experience. It provides many opportunities including:

• working collaboratively across industry with a wide range of people and firms,
• understanding the different perspectives of data collection from other firms and the regulators,
• helping to design solutions that will tackle the issues firms and regulators face with data collection processes, including redesigning how regulators work to make your life easier,
• working with and learning from subject matter experts from across industry,
• getting exposure to senior people across industry through our governance committees.

Here is what some of the phase one participants have to say about their experience of being part of the programme.

‘It has been great to be working collaboratively across the industry. It’s interesting working with other firms who have different perspectives, but many of the same problems.’

‘The regulators have been so open with us - interested in our ideas and keen to learn our perspectives. It's a unique opportunity for firms to engage- I'd really encourage everyone to get involved where they can.’

‘I believe we can make a real difference to the way that data is collected and all the features we have created can be scaled to other collections.’

‘You don’t really think about what happens to the data once it leaves the firm and it's interesting to understand the needs of the regulator and the issues and challenges that they face.’

‘Working on the programme has given me a lot of exposure to senior people across the industry through the committee meetings and committee working groups, as well as enabling me to engage with more senior people at my home organisation to syndicate the work we are doing.’

If you would like to see some of the outputs the team delivered during phase one of the programme, please contact us at TDCSecretariat@bankofengland.co.uk

How to get involved?

If you, or your firm, would like to nominate someone to be part of phase two the programme, the nominations process will be open from 27 April 2022. Once the nominations process has opened, all the required information including the nomination form, selection criteria and Terms of Reference, will be available on our Transforming data collection page. Nominations for committees will close on the 22 June 2022. Nominations for delivery team and TDC Advisory Group members will close once we have sufficient committed resource to carry out phase two.

You will be able to submit nominations for the delivery team, governance committees and the Reporting and Data Standards Transformation Board.

If you are unable to commit FTE resource to the programme, there will be other opportunities and ways for you to be involved. If you would like to find out more information, please contact: TDCSecretariat@bankofengland.co.uk

Other workstreams

We are continuing to progress other Transforming Data Collection workstreams.

• Procurement of the data standards review continues. The review has been held up due to a lack of internal capacity at the Bank of England.
• We are progressing our planning of the ‘standards-as-a-service’ proof of concept.

Future joint transformation programme communications and updates

Where to get communications and updates

We are committed to working in an open, collaborative and transparent manner. We will continue to provide programme updates every two months. In the meantime we will continue to publish the minutes from programme committee meetings. We have started engagement with FCA solo-regulated firms. For those not directly involved in the joint transformation programme, there will still be regular opportunities to be involved with our work and to give feedback.

You can find all communications from the joint transformation programme on the Transforming Data Collection page.

If you would like to get involved, or get more information on how to get involved, including our resource needs in phase two, please get in touch by emailing TDCSecretariat@bankofengland.co.uk. We can provide a resource requirement overview and job descriptions on request.