Find out the progress of the pilot with regular updates from the meetings of the Steering Committee.
Meeting 1: 26 June 2018
The first Steering Committee for the pilot was held on 26 June, with representatives from participant firms, the FCA and Bank of England. The key focus of the first meeting was to finalise pilot resourcing and agree the work programme.
In the meeting, the importance of the pilot was emphasised by all members as an opportunity to learn collectively in an efficient and affordable way. Existing open standards for data will be used and developed for efficiency and to avoid duplication wherever possible. Options for further development and scaling of the pilots will be explored, along with assessment of a range of technological and operational matters.
Metrics of the data quality and accuracy of data submissions will be used to evaluate the pilot and compare it to existing approaches to regulatory reporting. The pilot process must be as inclusive and flexible as possible for firms of all sizes with transparent and open communication beyond the direct participants.
However, there may not be a single solution that meets the needs of all firms. Delivering a core, open underlying architecture and approach would allow further development and customisation to meet specific firm needs. The group also discussed how to ensure that resources were in place by the beginning of July 2018 to commence the pilots.
Key goals of the pilot
At a high level, the core working group has also agreed on the following key goals. As an outcome of the pilot we aim to provide:
- a flexible solution which can be used by firms of varying size and business type
- a data model is produced flexibly to allow the incorporation of future reports into the model
Through this pilot programme we aim to reduce:
- the time taken for a firm to implement reporting requirements
- firm full-time equivalent spent on interpreting and implementing reporting requirements
- the cost of implementation of new reporting requirements
- the number of individual regulatory reports that firms have to produce
- the time taken to define new reports within a firm
- the cost of integrating the new solution into the firm so that it is less than the ongoing cost of regulation (business as usual cost)
The DRR Pilot started on the 2nd of July. The overall purpose of the Pilot is to evaluate the potential benefits of machine readable and executable regulatory reporting via the development of a minimum viable product (MVP). Four two-week Sprints have so far been completed using Agile ways of working (rapid prototyping, short feedback loops and refinement of a MVP). Every sprint scope is planned and prioritised by the workstream leads, followed by a Sprint Review session to review the project deliverables.
Alongside the FCA and Bank of England, the following firms have been participating in the pilot; Santander, Barclays, Lloyds, Credit Suisse, Natwest and Nationwide. The current working group includes 16 onsite participants and 5 offshore engineers. Further participation is encouraged from regulated firms able to commit resources. Input from academia, University College London and University College Cork, responses to our call for input, and legal firms, are also supporting the pilot.
We are also holding open demonstration and Q&A sessions to provide any interested stakeholders with an opportunity to understand the technological, governance, and legal and policy progress made throughout the pilot. These sessions are also an opportunity to review, critique and input into the work. The first open day was held on 22 August and the second will take place on 28 September. For further information, including participation in the pilot or if you would like to attend an open day, please email [email protected].
The development of the MVP is on track. As of 29 August, over 100 user stories have been developed and implemented in production, with further stories in the backlog to be delivered in future sprints. The MVP being developed is not intended to represent an end solution, but will help to establish the business viability of DRR. Any potential future proposals would be subject to the FCA and the Bank of England’s standard governance and consultation procedures.
Below is a summary of the work conducted in each workstream:
- Data – We are trying to demonstrate that our regulatory machine-readable framework can interact with a standardised language and be mapped to source data. We have been using semantic web technologies to identify the appropriate approach for the data specification.
- Data Analytics - We have been investigating the effect that DRR could potentially have on the current data landscape within the FCA and BoE. We are creating an interactive data science dashboard to demonstrate and explore these potential implications.
- Legal and Policy – We are exploring the legal implications of the various target operating model options. Specific focus has been given to the potential development of codified rules and any future implications on guidance and future compliance procedures. The policy workstream is seeking to provide a transition strategy for the potential future codification of rules, including the governance, drafting and consultation implications of such a change.
- Target Operating and Organisational Model – We are working to understand the different ownership options for key components of the MVP, for example data standards, machine readable code and the core technology platform, and the implications that each of these options may have on our operating model.
Each workstream is progressing well and we have identified ten key achievements of the programme so far:
- Infrastructure for the regulator and three simulated firms (so as to avoid testing with live data) in place.
- Regulatory network with private channels implemented on distributed ledger, with two pieces of regulation coded for Loan to Income and Common Equity Tier 1 Ratio.
- Application Programming Interface (API) specifications drafted to interact with coded regulation.
- APIs implemented to support the distribution of coded regulation and data in simulated firms.
- First version of front-end for firms and regulators implemented to monitor and manage regulation.
- Other potential prototype features for scheduling, execution simulation and login have been developed.
- Proposed data strategy and approach to data model and standards drafted.
- Policy and Legal working groups positioning papers drafted.
- Data Analytics working group formed to assess the pain points and opportunities from the new platform.
- Proposed target operating and organisational models drafted at high level.