The joint transformation programme is taking a use case approach in this work to research, design and test solutions to address the issues the regulators and industry face.
Phase one use cases
Phase one of the programme launched in July 2021 with a ‘discovery and design’ stage for the chosen use cases.
There were three use cases chosen for phase one:
- Quarterly statistical derivatives (DQ) return
- Commercial real estate (CRE) data
- Financial resilience survey (FRS)
The 'discovery and design' stage for phase one ended in March 2022 with the programme making recommendations for the use cases to the regulators.
The Bank and FCA’s response to those recommendations was published in July 2023 and clarified how the Bank and FCA will meet its commitment to deliver the first valuable change for phase one use cases.
Find out more about each of the use cases and their current status below.
Commercial Real Estate (CRE) data
Getting hold of good quality commercial real estate data is crucial for the Bank's ability to monitor prudential risk in the financial sector.
Whilst some progress has been made in creating a voluntary CRE database over the last few years, we are still some distance away from industry committing to and delivering the scope and range of data the Bank needs to perform its role in the market.
Work on the use case during phase one confirmed our initial hypothesis about CRE data: it’s crucially important data, but the current data we get is a poor fit for our needs, fragmented, and burdensome to collect.
We think completing the design of an integrated ‘transformed’ commercial real estate collection is a critical stepping stone to the delivery of future use cases, for instance a consolidated loan collection.
It was decided that we needed to carry out more work on this use case and it was continued into phase two.
Financial resilience survey (FRS)
In June 2020, the FCA commenced a regular quarterly financial resilience survey for solo-regulated firms.
This collection was chosen as a use case so we could focus on how we could improve the data quality, increase transparency about how the data is analysed, and consider how to transition the survey into RegData.
There are four strands to this use case
- Firm Portal
- Firm View at a Glance
- Intuitive Form Design
- Future Financial Resilience Survey
The FCA agreed to take forward four recommendations for the Financial Resilience Survey (FRS) use case. The recommendations and FCA’s response is set out in our publication from July 2022.
Quarterly statistical derivatives (DQ) return
The quarterly derivatives return is submitted by around 20 firms. The criteria for these firms reporting is based on them having gross derivative liabilities of over £10billion.
The return is submitted by these firms quarterly and summarises marked-to-market valuations of derivative positions at the end of each quarter.
The data are primarily used by the ONS for national accounts and balance of payments statistics.
This return was chosen as a use case at it allowed us to align with, and build on, existing industry and global authorities’ work on data standards for derivatives reporting.
The Bank agreed to take forward three recommendations for the Quarterly Derivatives statistical return (Form DQ) use case. The recommendations and Bank’s response are set out in our publication from July 2022.
Delivery of the phase one recommendations
As per the information above, the joint transformation programme made recommendations for the Quarterly Derivatives statistical return (Form DQ) and Financial Resilience Survey (FRS) at the end of the phase one 'discovery and design' stage. The Bank and the FCA responded agreeing to take forward seven solution recommendations.
From July 2022 to June 2023, the Bank and FCA programme teams worked to develop and deliver the recommendations. During this time, we tested prototypes with users to validate our solution designs. For some of the recommendations, these insights have led us to explore how the solutions can be designed to tackle wider issues being experienced for data collection.
In July 2023, the Bank and the FCA confirmed that they had met their commitments in delivering on the phase one recommendations. In doing so they have delivered benefits to themselves and firms. Read the full publication here.