White Paper

The impact of Covid-19 on Regulatory Reporting

The Covid-19 pandemic has brought into existence a series of additional burdens for Banks that have been forced to rapidly adapt in the context of an emergency.

Where are we now?

The outbreak of Covid-19 represented a revolution for Credit institutions and Banks all over the world, who found themselves having to adapt their processes in a very short period of time, both from a management point of view and to meet the new regulatory reporting requirements.

A New Regulatory Framework

In order to monitor the performance of their portfolios and highlight impacts generated by this crisis on specific institutions, the ECB and the NCAs have introduced significant changes to reporting obligations. Since the beginning of the pandemic and therefore from the launch of the various support measures of the European Governments, the Banks have been called to adapt their reporting processes to immediately respond to the requests of the Regulators (National and European).

Furthermore, in order to ensure that the European prudential regulatory framework (CRR and CRDIV, CRR2 and CRDV) did not act as an "obstacle" to the extraordinary measures adopted by national governments in the face of the Covid-19 crisis, the European Parliament and the Council of the EU have published EU Regulation 873/2020, which amends CRR and CRR2.

The need of an evolved reporting framework for Banks

The magnitude of the pandemic fuelled an extraordinary crisis that the entire system must address. In this scenario, the infrastructure and risk data aggregation functions have shown significant difficulty in their ability to monitor the impacts and risks with the requisite promptness and accuracy. Timeliness is of course the main challenge, because current processes and IT systems are mainly designed in order to run official reports on only a quarterly basis. On a monthly basis, only banks applying reporting best practices are able to run fully compliant Corep and Finrep, while the majority of the banks are able to perform simulation or simplified run on aggregate figures, or on a portion of the total assets.

Reply's Support

In this context, Reply supports its customers in the process of adapting to new requests not only in terms of changes in regulatory reporting in response to Covid-19 but more generally in the evolution of the entire data management framework in line with the principles of BCBS239, with the aim of making Banks and financial institutions capable of responding continuously, in a structured way and with minimum effort, to the requests of the Regulators in terms of production and availability of data.