10 July 2018
The overhaul of MAS 610 is set to become the “cornerstone” of further submissions to the Monetary Authority of Singapore (MAS), as future regulatory reports are likely to require data similar to that demanded by the updated standards, according to a regulations expert from PwC.
The Monetary Authority of Singapore commenced the implementation of MAS 610 on 1 April 2018, giving banks 24 months to make the necessary changes to their systems and processes to comply with the more stringent requirements.
Although the compulsory adjustments pose a massive undertaking for banks, the added effort is expected to pay off in the longer run.
“A number of regulatory reports will utilise the same sources of data as MAS 610. Compliance with MAS 610 can thus become the cornerstone to further regulatory submissions,” Thangaraja Nadaraja, risk assurance partner, PwC, told Asian Private Banker.
Nadaraja added that compliance with MAS 610 improves data quality and that, in the long term, this increased quality of financial data will help policy development and strengthen Singapore’s position as a global financial centre.
Taxonomy to decrease overlapping data input
Meanwhile, as the significant increase data required by the authority poses a hurdle to MAS 610 compliance, nine major banks in Singapore, as well as regtech firm AxiomSL, PwC Singapore and Business Reporting – Advisory Group (BR-AG), jointly released a taxonomy last month, aiming to streamline the data collection process.
“Taxonomy is a classification trying to bring down the number of data points that MAS is asking for from the banks,” Abraham Teo, AxiomSL’s global head of tax products and head of product management, APAC, told Asian Private Banker.
“Right now, MAS is asking for around 340,000 data points in the new regulations. What we’re trying to do is bring that number down to between 900 and 1,000 by changing the data points into business concepts.”
Teo explained that there are some overlapping and closely-linked requirements in the MAS 610 regulations that can be consolidated into business concepts, for example, in the case of credit evaluation and approval.
“Private banks handle a lot fewer clients but they have complex products to handle compared to retail banks. I don’t see much difference between retail or private banks for the concern of MAS 610,” Teo said.
According to Nadaraja, banks are currently using the taxonomy for data sourcing but none have thus far implemented the taxonomy.
“Taxonomy is agnostic to source systems and the reporting package. Sharing a taxonomy across banks ensures better quality due to input from a larger range of users. It also ensures that a range of products is covered and that there is consistency across users,” said Nadaraja.
Teo added that there is “no competition” among banks in the field of regulatory reporting.
“Everyone is talking to each other within the industry, looking to understand what MAS wants and trying to comply and improve efficiency,” he said.
This article was originally published by Asian Private Banker.