Following the 2008 global financial crisis, which has shown that the capacity of banks to manage risks during "stress" periods was insufficient, the Basel Committee took the initiative to publish the
BCBS 239 standard. This guideline aims to increase the capacities of banks in terms of aggregating financial risk data, producing reports and improving the quality of the risk data.
Although the deadline for applying the BCBS 239 standards for systemically important banking institutions at the national level was set for January 2019, most of them have fallen behind. In order to avoid heavy fines, these institutions have committed to regulators to make the application of the 11 principles of BCBS 239 their priority.
In summary, we can say that financial institutions have been required to not only review their
risk management processes, but to provide detailed reports in granular formats to regulators on the risks they face and the impact on their capital and liquidity.
However… If banking regulations are often perceived as a burden, in reality, they are an opportunity!
It is an opportunity to simplify and improve many processes by automating them. Indeed, regulatory reporting is a complex process that can involve many different systems and numerous human interventions and manual processes. The volume and complexity of regulatory reporting makes all of these processes prone to error.
This is the right time to implement an efficient data structure that provides the guarantee of the availability and the integrity of information in time for reporting purposes. It also helps to
prevent a financial institution from being burdened by a huge amount of unstructured data, which will lead to significant storage costs, and bring greater complexity to operational and regulatory processes.
Finally, bringing a bank's data architecture into compliance with the BCBS 239 standard can increase agility regarding regulatory changes and eliminate losses resulting from insufficient risk management. It improves
decision-making and ultimately, business performance and profitability.