Standardising banks’ data reporting
In the European System of Central Banks (ESCB) and its Statistics Committee, we provide policymakers and analysts with the high-quality data they need. At the same time, we are constantly working to make data collection more efficient and reduce the reporting burden on banks.
Wherever possible, we aim to harmonise, standardise and integrate existing ESCB requirements for collecting statistical information from banks across statistical domains and countries. This helps automate data processing and enhances data quality.
The approach builds on three pillars:
- cooperation with other European authorities to integrate statistical and prudential reporting under the future Joint Bank Reporting Committee;
- the Integrated Reporting Framework (IReF) to integrate existing statistical reporting as a first step towards broader integration;
- cooperation with the banking industry to develop a unified approach through the Banks’ Integrated Reporting Dictionary (BIRD), which supports banks in reducing their efforts to correctly and uniformly extract information stored in their internal systems, so they can fulfil their reporting requirements more efficiently.
Integrating statistical and prudential reporting
The broader framework for improving and simplifying reporting requirements is the ESCB integrated reporting strategy. This strategy was outlined in the ESCB’s input to a European Banking Authority (EBA) feasibility study on an integrated reporting system, published in 2021. The aim is to avoid duplication, standardise concepts and ultimately reduce the reporting burden for banks.
To help in the development of this strategy, the ECB is actively participating in an informal coordination group on the semantic and syntactic integration of reporting, alongside the EBA, the Single Resolution Board and the European Commission. It has also proposed that a Joint Bank Reporting Committee (JBRC) be established, made up of representatives from the relevant European and national authorities, to involve the banking industry on an ongoing basis. The committee would advise on how to best integrate statistical, resolution and prudential data reporting and steer the data sharing process. It should be up and running in the course of 2023.
Integrated Reporting Framework
The Integrated Reporting Framework (IReF) will integrate the Eurosystem’s statistical requirements for banks into a single standardised reporting framework applicable across the euro area. It may also be adopted by authorities in other EU Member States.
IReF focuses mainly on the ECB’s requirements in terms of banks’ balance sheet and interest rate statistics, securities holdings statistics and granular credit data. Data collection and transformation processes will also be standardised across countries. To maximise the benefits of integration, any relevant reporting obligations from national collection frameworks used by national central banks are also taken into account. In its initial stage, IReF will only cover ECB statistical frameworks that directly relate to banks’ balance sheet assets and liabilities. It will not, for example, cover ECB requirements relating to payments or money market statistics. IReF is also designed to ensure proportionality by limiting the reporting obligations for small banks.
The ECB announced the design phase of the IReF programme in a press release. The programme is expected to go live in 2027.
What are the advantages of IReF?
Integrating existing statistical requirements into IReF will help banks with their data reporting by standardising reporting obligations, reducing redundancies and overlaps, minimising the reporting burden and enhancing data quality. IReF will also help with data processing automation while minimising the cost of any further changes to the data collected. The framework will be of particular benefit to banks operating in multiple countries, as the integrated requirements will facilitate consistent and standardised reporting across borders. Statistical compilers and other users will also benefit, since integration will enhance the cross-country comparability of data, improve data quality and data collection, and reduce the time to market required for agile policymaking and analysis.
What is the current status of the programme?
In November 2020 the ESCB initiated a cost-benefit assessment, in collaboration with the banking industry, to evaluate the impact of IReF. All euro area countries and Sweden participated in the exercise. The assessment was completed in April 2021 and confirmed strong support for IReF within the banking industry and among stakeholders, with a large majority of banks confirming that the reduction in reporting costs would outweigh the investment required.
A report summarising high-level considerations and a number of high-priority technical aspects was published in December 2021 by the ECB, which subsequently released three more detailed reports in September 2022 focusing on different elements of the programme.
The ESCB, together with all other stakeholders, launched a complementary cost-benefit assessment in May 2023, aimed at clarifying additional topics relating to IReF. The outcome of the survey is expected to be published by the end of 2023. The Eurosystem will then draft an ECB regulation on IReF. The draft regulation will be subject to a public consultation – currently planned for 2024 – before it is finalised and adopted. The regulation will then replace the existing legal provisions on the collection of datasets within IReF, and the relevant existing ECB regulations will be repealed or amended, as applicable.
Banks’ Integrated Reporting Dictionary
The Banks’ Integrated Reporting Dictionary (BIRD) is a cooperative effort between industry and authorities to minimise the reporting burden while increasing the quality of data reported to authorities.
The ECB, other European authorities, the European Banking Federation, several national central banks and many commercial banks are working closely together to develop and maintain BIRD. The project is a “public good” and freely available to interested parties such as banks, consultancies and software vendors developing application packages for financial reporting. Given the voluntary nature of BIRD, its adoption is free for the industry, as is the use of any of its components.
What can banks expect?
BIRD offers cooperative interpretation and transposition of the regulatory reporting requirements at the operational level, reducing banks’ reporting burdens and improving the quality of data reported to authorities. It also allows for open discussion between all stakeholders on how reporting requirements can best be met to achieve the “Define Once” principle, and how they can all be derived from a single source.
How can BIRD and IReF benefit from each another?
BIRD is designed to help banks generate statistical and supervisory reporting outputs that are free of redundancies and satisfy the reporting requirements of European legal acts. At present, each national central bank collects information under its own statistical reporting framework. These frameworks vary, so country-specific adjustments are required to implement BIRD at the national level. IReF will introduce a common layer for collecting statistical data from banks, allowing BIRD to be applied in a consistent way across euro area countries. Reporting agents will be able to understand and use BIRD for statistical reporting, with no need for national adjustments. Ultimately, this will help reduce the reporting burden on banks and improve the quality of data reported to the relevant authorities.More information "What is BIRD?"