News release
The Financial Conduct Authority (FCA) and the Bank of England (Bank) today outlined their plans to develop their data and analytics capabilities. Both authorities depend on access to high-quality data to fulfil their respective missions of maintaining monetary and financial stability, market integrity, effective competition and consumer protection.
The FCA’s refreshed Data Strategy sets out a transformation plan to become a highly data-driven regulator. The strategy outlines the organisation’s increased focus on the use of advanced analytics and automation techniques to deepen its understanding of how markets function and allow the FCA to efficiently predict, monitor and respond to firm and market issues. Alongside investment in new technology and increased use of external data, the FCA will pursue a broader transformation, investing in skills and new ways of working to enable it to better understand and use data and innovative technology. The approach includes data science units being established in selected parts of the organisation and exploitation of new opportunities arising from the FCA’s migration to cloud-based IT infrastructure.
The Bank of England has published a Discussion Paper (DP), “Transforming data collection from the UK financial sector”, to improve the timeliness and effectiveness of data collection from firms across the financial system.
The Bank’s DP marks the first step of a review announced in its response to Huw van Steenis’ Future of Finance report, which recommended that the Bank develop a new digital data strategy. The DP sets out the issues facing the current data collection system and identifies and explores a series of potential solutions, to prompt feedback from and further discussion with industry.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“Advances in technology are changing the nature of the firms and markets we regulate. Our Data Strategy provides a clear path for us to ensure we have the necessary skills and processes in place to remain at the forefront of this change. In keeping with our Mission, a data-driven approach to regulation allows us to anticipate harms before they crystallise, better understand the effect on consumers of changing business models and to regulate an increasing number of firms efficiently and effectively.”
Sam Woods, Deputy Governor for Prudential Regulation and CEO of the Prudential Regulation Authority, said:
“Having the right data is vital to our role as a regulator, and to the ability of banks and insurers to manage themselves effectively. Recent developments in technology should allow us to improve how we collect data from firms, making reporting more timely, more effective and less burdensome for firms. This is potentially a major change so we want to work closely with firms to make sure we get it right over the next decade – our Discussion Paper starts that process by setting out the strategic issues in order to stimulate a debate about the way forward.”
In addition, the FCA, the Bank of England and seven regulated firms have jointly published a Viability Assessment report on the latest Digital Regulatory Reporting (DRR) pilot. DRR will potentially allow firms to automatically supply data requested by the regulators, thereby reducing the cost of collection, improving data quality and reducing the burden of data supply on the industry. This document covers an assessment of the technological and economic factors that may impact a shift towards more automation in regulatory reporting. Following this report, the Bank of England and FCA have committed to continue to work together to:
- explore joint work on common data standards;
- commission a joint review of the legal implications of writing reporting instructions as code;
- commission a joint independent review of some of technical solutions explored as part of the Digital Regulatory Reporting (DRR) pilot, and
- collaborate closely while engaging with industry and planning future phases.
Notes to editors
- Discussion paper
- Future of Finance report and Bank’s response
- FCA’s Data Strategy Opens in a new window
- The Bank’s DP draws on lessons learned from the DRR pilot Opens in a new window, a joint initiative between the FCA, Bank of England and seven financial firms, which looked at how technology can be used to improve data collection
