In light of the Covid-19 pandemic, regulators have, unsurprisingly, followed the lead of their central bank cousins. One consequence is that transformational regulation, like MAS 610 and 1003, has been delayed. This wise course of action affords banks the chance to ensure they have every opportunity to comply and avoid the consequences of not doing so.
It is now essential that banks take this time and deliver a complete response.
The bad news
MAS 610/1003 does not explicitly state requirements for proving the lineage of data (the flow of data through a bank’s systems), however, there are compelling reasons to follow this path. The MAS does audit banks and will fine them for their failings. At the heart of a report, that requires over 300,000 data points to be reported, is data. Ensuring the provenance of that data is therefore critically important.
The complexity of the reporting also requires a tool with the ability to review data sources at a vast scale – each data point likely passes through several reports on its journey to the MAS. Understanding this is hard, really hard. Trying to do it in a spreadsheet or Visio is a big task. And that is before we even start to consider the challenges faced in collaborating on reports across teams, let alone across departments, all of which have their own glossary of terms to describe the same field in a report! Knowing what was changed, by whom and when is also impossible, guaranteeing a lack of accountability.
The bad news does not stop there. The experience from comparable major increases in regulatory reporting requirements, such as Dodd-Frank and MiFID II, is that organisations struggle to meet these additional burdens in anything other than a ‘one off’ manner. This means, in all likelihood, that a bank will bring together its SMEs and select consultants to develop the report. Once this is done, the project documentation will be stored and the team will scatter, effectively making it impossible to further leverage these resources. Any changes to the report will require the bank to start, once more, at the beginning and go through the cost and effort all over again.
The good news
Solidatus was, quite literally, built for this challenge. One of our co-founders, Philip Miller, has indepth experience of exactly these challenges, which led him to build a solution to the problem. Philip Dutton, our other co-founder, faced similar problems but for him it was around system transformation. At the heart of the issue was an inability to institutionalise a particularly elusive form of intellectual property: the knowledge of key individuals, and how to make this expertise available across the enterprise. Also managing and visualising these flows across multiple tabs of Excel was a solution fraught with risk.
Solidatus is designed to simplify the collation of these reporting sources in one place. By focusing on metadata, access to all of the needed information is significantly simplified. We then present it in a way that is easy to understand and can show these lineages. We can do this at scale, for the whole of the MAS 610/1003 report, or at a granular level - looking at the lineage of each field to be reported.
Solidatus also enables many people to work on the model describing the report at the same time. We can incorporate dictionaries, glossaries and inventories to maximise collaboration and minimise confusion between compliance, business units and those who will build the report – all with their own expertise and language. We also show the change over time – every time the model changes we record it, giving management confidence in the reporting. With Individual Accountability and Conduct Guidelines (IACG) on the way, but also delayed, this is ever more important.
Finally, we also solve the challenge of re-use. We build an operational blueprint of the organisation that can then be leveraged to assist in the transformation projects Philip Dutton envisaged Solidatus for.
When, as they inevitably will, the regulations change we can then just map the differences between the old and the new and focus on those – no need to start, at great cost, all over again. By virtue of its comprehensive scope, this report can also be used as the basis for future changes in other jurisdictions, enabling an iterative and agile approach that creates the best outcome at a substantial reduction in cost.
Identifying and recording the current data estate in Solidatus enables and informs planning for the future, reducing the risks around change, empowering banks to become more dynamic while responding aggressively and with confidence to the upcoming threat from Digital Banks in Singapore.
For more information about MAS 610/1003 and how Solidatus can help, read our Webpage and download our Factsheet.