When one yes equals BCBS 239 compliance

When one yes equals BCBS 239 compliance

Paul McPhater

COO enterprise software at Markit Group Limited

Views 852

When one yes equals BCBS 239 compliance

02:00 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

James Booth PPRO

Brave New World: A Futuristic Vision of Payments

Over the last ten years, the retail e-commerce ecosystem has undergone a wide-ranging transformation. As recently as 2010, the e-commerce and payments value chain were relatively straightforward: Any eCommerce merchant could integrate a payment Read more »

Nish Kotecha Finboot

How blockchain could potentially transform global healthcare in the wake of COVID-19

In the globalised world we live in, entities such as the World Health Organization (WHO) have been established to ensure cooperation between different governments on global health-related issues. In the face of pandemics such as the one we are Read more »

Lina Andolf-Orup Fingerprints

Dispelling biometric myths and misconceptions

Gangsters cutting off enemies’ fingers to access secret locations and spies lifting fingerprints from martini glasses - the imagination of the entertainment world has been running wild ever since biometrics entered the scene. Couple that with the Read more »

Shiran Weitzman Shield

Tackling Apparent Contradictions of Compliance versus Privacy

As technology evolves and becomes more complicated, so too do the moral and ethical dilemmas, along with the associated regulations. However, well-intentioned regulations designed to protect people and businesses alike can sometimes seemingly Read more »

Francis Leclerc Horizon Software

Just about managing: How cloud can help boost trading profits

It’s a tough environment for trading at the moment. Margins are being squeezed across the board to the extent that some major investment banks are completely withdrawing from certain asset classes upon discovering they are not making a profit. Read more »

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