When one yes equals BCBS 239 compliance

When one yes equals BCBS 239 compliance

Paul McPhater

COO enterprise software at Markit Group Limited

Views 877

When one yes equals BCBS 239 compliance

08:00 am

Defining what BCBS 239 compliance looks like remains clouded in mystery. Tough ‘show and tell’ discussions rage on between banks and regulators as to what absolutely must be done to meet the requirements of the principles. But what if it could all be rolled up into a simple litmus test? One that could be presented to your board as being a good, solid marker as to how close your bank realistically is?

BCBS 239 is the show starter. Risk data aggregation standards across the industry as a whole are the expected goal. Any and all firms should consider solid risk data aggregation as an opportunity to simplify operations, an opportunity to demonstrate a sound risk management model and an opportunity to share business critical risk data.  

So what is the big question that firms must be able to answer in order to benchmark their risk data aggregation capabilities? Here goes. If your firm was theoretically divesting a business unit, would you have all the data to hand? If you would, you are compliant. If you wouldn’t, you’re not.

Want to know the scary part? At this stage, no one is compliant and the deadline is literally a matter of months away. All sides appear to have underestimated the scale of the task: the changes needed to existing processes and systems; the limitations of existing risk reports; the continued inadequacies of capturing an accurate risk profile during crisis situations and the commitment and comprehension needed at C-suite level. There are also battles raging on for internal expertise.

At this stage, the compliance bar has lowered to one of intent, to the spirit of compliance. Banks are also typically looking at a pared down version of a true risk data universe. The internal data web in banks is proving so complex that there appears to be limited clarity on how it holds together.

Compliance at the January deadline currently looks like this: the bank can demonstrate a clear intention to build a strong risk data aggregation framework, the bank is some ways along the path to doing so and the bank has put money behind it.

We are some way soft of a perfect compliance model. Tactical projects appear to be the focus for now. The hope is that these tactical responses are a starter pack to a single, strategic platform.

Latest blogs

TYRON JONES n/a

How Technology Has Disrupted the Used Car Buying Experience

We’ve seen many fields change rapidly as a result of the integration of modern technological advancements over the last couple of decades. And it looks like more is coming on the horizon as well, judging by current trends. One of the markets that Read more »

Shuvo G. Roy Mphasis

Reboot 1.0: How financial services technology can enable the supply chain to support a post-lockdown boom

Ground control and Captain Tom When veteran Captain Tom Moore decided to walk one hundred laps of his garden before his 100th birthday to raise funds to support NHS heroes battling Covid-19 from the frontline, he never imagined that he would Read more »

Lisa Gutu Salt Edge

Building a PSD2 compliant channel: challenges and opportunities for financial institutions

PSD2 obliges ASPSPs including banks, e-wallets, prepaid cards and other companies that offer payment accounts to provide at least one channel for secure communication with third party providers (TPP). Even neobanks or e-money institutions, including Read more »

Thomas Pintelon Capilever

Credit origination - A lot of innovation on the horizon

While consumer credits are becoming more automated and user-friendly to request, all other credits are often still very manual and labor intensive to originate. In this (relatively long) blog I will try to give a description of the (potentially Read more »

Kelly Kearsley Hourly.io

Time Card Theft is a Big Problem. Here's How to Stop It.

Trust is at the core of every employer-employee relationship. You trust your people to do their jobs, and they trust you to compensate them for their work. Most of the time, it works. However, there's always the person looking to bend the rules or Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel