Invoke was delighted to join Revue Banque for their December Club Banque event, this time on Regulatory Reporting: Project IReF. Speakers from some of Europe's leading financial institutions and regulatory authorities joined together for an enlightening evening of IReF insights, chaired by Invoke's Antoine Bourdais.
Hosted by Revue Banque, the leading French specialist media for the banking industry, Club Banque is a monthly event which brings together a select and limited number of finance decision-makers and their partners, to share knowledge and information that can be used in their strategic decision making and in practice.
A unique space for creating and sharing dialogue, Club Banque helps strengthen and deepen the banking culture for professionals in the sector, giving a complete vision of the regulations, innovations and organisational models which shape the sector, and support its development.
December's Club Banque event brought together experts from the EBA, Banque de France, Société Générale and Rothschild & Co., to discuss the latest developments in the Integrated Reporting Framework, (IReF), as part of a broader Integrated Reporting System, and share insights on its impact on financial institutions and supervisory bodies, both now and in the future.
As a subject matter expert, Invoke's Head of Regulatory Division, Antoine Bourdais, was invited to chair the event's proceedings and discussion.
Here, we summarise the key takeaways from each speaker session, to bring you up-to-date with the latest IReF developments...
Update on EBA Integrated Reporting: Meri Rimmanen, Director of Data Analytics, Reporting and Transparency, EBA
The Integrated Reporting Framework has a simple promise for the banking sector when it comes to prudential, statistical and resolution reporting: “collect once, report once.” Its primary objective is to provide greater efficiency and reduce costs for the entire European reporting ecosystem.
Rimmanen gave useful insights into the lessons learned from the EBA’s feasibility study on the data dictionary, centralised collection of data and governance. The roadmap for integrated reporting in 2023 is promising, with the establishment of the JBRC (Joint Banking Reporting Commission) and an active contact group within the banking industry.
Work continues on the single data dictionary, including the semantic integration of models, evaluation of the DPM Refit for statistical reporting, definition of the granularity of prudential data, consideration of CRD VI, and new ESG requirements.
Supervisory authorities are committed to turning this vision into reality with a view to working with the industry, and ensuring that intermediate steps such as CRD VI and IReF fit well with their trajectory.
IReF scope and state of play: Yann Wicky, Head of European Statistics Department, Banque de France
For Yann Wicky, the keyword for project IReF is 'convergence'. The Banque de France wants to ensure the needs of the French banking industry are centralised within the IReF project, by actively participating in workshops with the European Banking Centre.
The first Cost-Benefit Assessment (CBA) carried out from 2020 to 2021 shows good general support for IReF from the banking industry, and a desire to move towards integrated reporting which also considers national specificities.
An additional CBA is scheduled for 2023.
IReF and how to prepare for granular reporting: Jean-Marc Hilaire, Banking Business Senior Expert, Société Générale
"IReF is the most strategic and ambitious project of the statistical function since the creation of the Eurosystem."
Before sharing his experience of the work taking place on IReF within Société Générale, Jean-Marc Hilaire set the tone with this quote from Francois Mourieux, Director of Monetary and Financial Statistics at the Bank of France.
As a cross-border bank, Société Générale has been involved in the development of IReF and the accompanying BIRD initiative from the beginning, actively participating in working groups on the initiative. Hilaire acknowledged that IReF presents some challenges as well as benefits, and there is an impact on the information system architecture for Société Générale, as they prepare for the IReF principle of “collect once, report once”. These include:
• the need to arrive at a coherent and homogeneous collection model
• the level of granularity of the different data sets
• integration of national needs
• where to position BIRD in the production architecture of regulatory systems
Hilaire also noted that, from the viewpoint of regulated entities, IReF is a project that will happen very quickly.
IReF and data quality - how to best approach granular reporting: Stéphane Le Blévec, Rothschild & Co.
How can less significant institutions (LSIs) prepare now to minimise the future impact of granular reporting on data quality?
Stéphane Le Blévec shared his experience of the implementation of ‘data quality management’ (DQM) within Rothschild & Co., and the impact it has had. His key takeaways were:
• the importance of starting work on data quality in a well-controlled project scope, noting that "if we do top-down in this type of approach, we can drown very quickly”.
• the importance of effectively governing a DQM program, and including people and key skills that extend beyond the financial department to involve other business lines, IT teams and data users.
• the essential role that controls play in an industrialised system for continuous improvement of data quality.
• the significant leverage effect in terms of operational efficiency, beyond simply the regulatory aspect.
Rothschild & Co. started to apply their DQM approach for AnaCredit, which required very granular reporting and exacting data quality. Following the success of this first trial, Rothschild & Co. deployed the data quality model function more widely within the group.
Invoke will share updates and information on the development of IReF as it happens, in our regulatory alerts and in expert papers on our website. Follow us on LinkedIn and Twitter to be the first in the know.