Xenomorph’s BCBS 239 Solution handles all the required data management aspects of BCBS 239, such as capture, cleansing, transformation, validation, audit, governance, and distribution; and its unmatched asset class coverage and innate understanding of complex business objects make it an effective and quick to implement solution for the issues raised in the regulation standard.
What are the Data Management Requirements of BCBS 239?
The Basel Committee on Banking Supervision’s principles for effective data aggregation and risk reporting as laid out in BCBS 239 provide a framework for best practice in the industry. Adherence to the BCBS 239 principles requires real change for an institution, its approach to data governance and how data is managed across a raft of legacy systems. Just producing regulatory reports is no longer a sufficient response, as BCBS 239 concentrates on the data and architecture underlying the reports produced, not just the reports themselves.
To satisfy the conditions of completeness and comprehensiveness, risk data from multiple silos needs to be integrated, presenting a challenge to often highly complex and diverse institutions. Large institutions formed by mergers could previously pass reports to the regulators through individual balance sheets; now a consolidated balance sheet view is required.
Having a clear understanding and map of data within the organisation, its processes and where manual touch points occur is the first step to implementing a robust platform for decision-making and reports. Further questions follow from this such as how the data is shared and if there are data quality metrics in place.
In addition, demands on IT architecture from the BCBS 239 principles relating to frequency and speed, especially in times of stress and crisis, mandate a framework that is scalable and robust.
A focus on data processes and data governance requires alignment across risk solos. The emphasis placed on data quality, accuracy, integrity and completeness need a system capable of providing consistent and identical data with all departments referencing the same cleansed, validated, quality data sets. On the reporting side, all data inputs to risk reports need to be traceable and auditable.
Along with validation, traceability and lineage features, in many instances what is required is more efficient use of data in general for the business with centrally stored and near real-time data available, allowing greater efficiency in calculations of capital and collateral. Again the focus falls on IT departments to provide solutions capable of managing the scope and volume of data needed to feed the reports.
Xenomorph BCBS 239 Data Management Solution
Xenomorph’s BCBS 239 data management solution provides a comprehensive platform for the risk data aggregation and reporting requirements in BCBS 239. It can accept data from any source – sitting on top of legacy systems and infrastructure where required – and aggregate that data through automation and workflows into a single centralized data set.
Data quality processes are fully automated with configurable workflows for data cleansing and exception management. Together with strong data governance and controls they support the Accuracy and Integrity elements of BCBS 239.
Our data management solution provides many other features that address the Completeness, Governance and Reporting requirements laid out in the BCBS 239 principles, such as:
- A very flexible data model that can support any asset class/object type with both standard and user-definable extensions. In this way it can support different asset classes, risks and their associated data, even if the need was not originally foreseen.
- Data taxonomies and metadata are easily built from the system and are available in applications, reports and through APIs.
- The system supports a full audit trail with reporting on data, rules applied to data, and user permissions – which is vital for dealing with regulators and auditors. This provides a complete data lineage, explaining how data was promoted to official “gold copy” status from its raw source at data capture.
- The system can easily integrate analytics alongside of data so that derived data is part of the centralized data management process and audit, not separate to it.
- Gold copy data can be established across different asset classes and risk types. Multiple gold copies can co-exist if data needs/policies differ across departments (e.g. in risk and finance).
- The system has/integrates with a comprehensive set of reporting and BI tools to cope with changing client needs and changing risks.