BCBS 239 – Risk Data Aggregation and Reporting

 B, Definitions, Knowledge Exchange  No Responses »
Jan 102021
 

What is BCBS 239?

  • In 2013, the Basel Committee released BCBS 239, outlining 11 principles relating to Risk Data and Aggregation that Global Systemically Important Banks (G-SIB) banks must adhere to. These outline expectations for the accuracy, timeliness and comprehensiveness of Risk Data and Reports.
  • Other national regulators, have identified Domestic Systemically Important Bank (as D-SIBs) that must demonstrate compliance with these principles by various dates from 2016.

Why BCBS 239?

  • One of the most significant lessons learned from the global financial crisis that began in 2007 was that banks’ information technology (IT) and data architectures were inadequate to support the broad management of financial risks.
  • Many banks lacked the ability to aggregate risk exposures and concentrations quickly and accurately at the bank group level, across business lines and between legal entities. Some banks were unable to manage their risks properly because of weak risk data aggregation capabilities and risk reporting practices. This had severe consequences to the banks themselves and the stability of the financial system as a whole.

Why is this a challenge?

  • The breadth and scope of these principles significantly raise the bar relating to regulatory expectations on the robustness, repeatability and level of automation of Risk data and reporting capabilities.

What are the 11 areas covered by BCBS239 principles ?

Governance Governance
Data Architecture & IT Infrastructure
Data Accuracy and Integrity
Completeness
Timeliness
Adaptability
Reporting Accuracy
Comprehensive
Clarity
Frequency
Distribution

Functions vs Processes – What is the difference?

 F, Knowledge Exchange, P  No Responses »
Oct 112020
 

It may seem obvious that Functions and Processes are very different things. When it comes to a Target Operating Model (TOM) there is plenty of scope for confusion.

A functional model describes the grouping of capabilities of an organisation, whereas a process defines a sequence of steps. However, it is not always that simple. Some functions, for example Independent Price Verification (IPV) are also processes.

Below I have given my definitions. What are your thoughts? Please comment below.

Function

A capability, or a grouping of related activities that must be done by a person or a system in order to deliver the overall business strategy

A function does not illustrate inputs, outputs, connections between functions or the business roles involved in executing the function.

Process

A Business Process is the execution of a sequence of related steps in response to an event that leads to a clearly defined deliverable or outcome. A number of business role may contribute to the execution of an end-to-end Business Process.

A process does not define a function; instead a function will be made up of many processes, which can span multiple functions

Thoughts?

Please leave your thoughts below.

New theme at Banking Glossary

 Knowledge Exchange  No Responses »
Feb 062020
 

I’ve spent this weekend doing some heavy redesign of the site.  It now has a whole new theme, based upon Suffusion.  It also now has an alphabetical drop-down to select definitions by letter.

What do you think of the new look?  Is it easy to navigate.  Any suggestions for improvements?

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