BCBS 239: The issue of frequency and accuracy of risk reporting

 

BCBS 239 :    The issue of frequency and accuracy of risk reporting.

The ECB published a guide in July 2023 to re-specify its expectations under BCBS 239. It plans to strengthen the supervisory system in terms of data quality.   The overall objective of BCBS 239 is to strengthen banks' risk data aggregation capabilities and internal risk reporting practices, thereby improving risk management and decision-making processes in banks. “The right information must be available to the right people at the right time.”   The implementation of BCBS 239 is not a priori simple.   For what ? Despite this increased prudential supervision,  the ECB has still not noted sufficient progress in 2023: “the data quality and risk reporting system does not yet receive the appropriate level of attention from banks”.   We have had a lot of discussions with our banking customers. What seems to be lacking is the automaticity and completeness of analyzes in extremely complex environments.    Building on this constant, we provide very lightweight data lineage tools, 100% automated, even in ultra-complex systems, which allow analysis of the data at source up to the dashboard cell. On first or SaaS.

1. A 100% automated approach.     {openAudit} , our software will technically analyze the complete platform on a daily basis.  By relying on parsers and probes that work continuously,  {openAudit}  allows ultra-granular daily analysis of the system, without the need to build teams of data stewards to exclusively serve the project.   2. Data lineage in data flows

To meet the requirements of Accuracy & Integrity, {openAudit} automatically analyzes the technologies that process data in Information Systems. We run the flows from “end to end” in the databases with a granularity of your choice. No need to revolutionize your architecture,  {openAudit}  "pierces" the complexity of the most voluminous and heterogeneous "Legacy Systems", but also Cloud architectures.    NB: we know how to process flows in Moodys RiskAuthority™   3. Data lineage in the reporting layer   Data visualization solutions make it possible to do “data preparation” on an increasing scale.  They now contain most of the intelligence that was previously built in the data marts. However, all of the management rules, often stacked and overlapping, end up creating an inextricable tangle.   {openAudit}  analyzes the structure of the dashboards, the metadata found there, therefore the intelligence, structure, sources, etc., so that the data lineage is an exact reflection of reality.    The results can be exported in SVG, in the form of a database, or an Excel spreadsheet and therefore shareable internally or with regulatory authorities.  The {openAudit} databases   are also open for the implementation of ad hoc analyses. 4. Monitor risk reporting with a single eye   All reporting is displayed on a single {openAudit} interface , and the dashboards which present “pathologies” are identifiable by a color code.   The desynchronization of a dashboard in relation to physical sources is highlighted;  The dashboard which is completely dysfunctional (which no longer displays results) is identifiable; The dashboard that is replicated is displayed with its clones and the details of the replicated elements (background, shape, expression, filters, etc.) are accessible;  The obsolete dashboard is identifiable, etc.    (below an example in SAP BO)   5. Monitor flow scheduling at a glance   {openAudit}  allows you to validate at a glance the quality of the scheduling of supply chains.   Anomalies are easily identifiable. Examples:   Procedure launched and not executed, Degradation of execution times.    From this interface, it is possible to return to the data lineage to inspect the flow from a technical point of view and intervene if necessary.   Conclusion    The ECB has decided to strengthen its requirement regarding BCBS 239, because in its opinion, the data quality and risk reporting system is not yet at the expected level.   This is a challenge, because the implementation of all the points in this text requires significant investments.  We believe that the automation of all processes, their ability to “live” in parallel with the analyzed system, is the sine qua non condition for BCBS 239 to be a lasting success.  The benefit is that BCBS 239 can benefit the entire bank by reinforcing the importance of data quality and data governance.  This can improve any decisions and reduce their implementation time. #BCBS239 #datalineage