February 13, 2018
Proposed changes to Singapore’s current comprehensive banking regulation reporting regime could phase out manual reporting, in line with global trends.
Following the Monetary Authority of Singapore’s (MAS) second consultation for amendments on MAS 610 reporting last year, the regulator plans to implement the new directives by the end of this quarter, with a 24 month transition period and a six month testing period.
The new regulation will cover multiple types of banks including private banks and wealth managers.
According to a briefing prepared by consultant firm EY, the MAS 610 amendments aim to “promote market transparency for banks and ensure the MAS has sufficient information to identify potential systemic or microeconomic issues”.
“The recent MAS 610 reporting changes [will see] an exponential increase in the amount, granularity and the frequency of data that the banks have to report [and] what needs to be reported,” Peter Tierney, APAC CEO of AxiomSL, told Asian Private Banker.
The new 610 reporting will also see an increase in required data fields. While current regulation requires around 4,000 data fields, this would expand to approximately 320,000.
Tierney believes this is a “significant jump” from MAS’s current requirements for banks and wealth managers, suggesting manual methods such as using an excel sheet for reporting “would no longer be possible”.
Taxonomy is developed to facilitate reporting
While the MAS data requirements may appear extensive, these changes are part of a wider global trend. Taxonomy, which is a standard format provided by regulators to financial institutions to facilitate reporting, has been increasing along with a growing emphasis on reporting particulars.
The Australian Securities and Investments Commission, which announced its data strategy for 2017-2020 last September along with a new taxonomy set-up, is aiming to establish a “Chief Data Office” to strengthen data governance.
“Some European countries and Australia have already set up their own version of taxonomy and now Singapore is working towards one,” Tierney said.
The tech vendor is leading collaborations with nine banks, along with PwC and Business Reporting Advisory Group (BR-AG), to define an open data structure which will simplify and streamline compliance reporting for the revised MAS 610 reporting mandate.
According to AxiomSL’s press release published recently, the nine banks include two Domestic Systemically Important Authorized Institutions (D-SIBs) and seven international banks including four Global Systemically Important Banks (G-SIBs).
“PwC will provide advisory services and act as the project management office for this initiative. BR-AG, a data consulting firm that has a proven track record with central banks and regulatory authorities globally, will draft the data model and XBRL taxonomy,” the tech firm’s announcement read.
Tierney says these changes are in line with the industry’s natural evolution.
“We have watched the evolution of structured data exchange in other regulatory contexts and jurisdictions around the world. The benefits in terms of automation and data quality are clear, both for the FIs and the regulators,” he said.
Banks should be ready for “wave of supervisory questions”
Along with the development of taxonomy and increasing reporting requirements, Tierney said compliance trends have become more advanced.
“Compliance has become less about filling out forms and more about making sense of the data collected. It’s not about the “report”, its all about the supervision that underlies the report.
“Banks and wealth managers need to be ready for the wave of supervisory questions that will come from this data.”
This article was originally published by Asian Private Banker