An update from the joint transformation programme - March 2023
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The Bank of England (the Bank) and the Financial Conduct Authority (FCA) are working together with industry to transform data collection from the UK financial sector. We are doing this through a joint transformation programme. In this publication we provide an update on the joint transformation programme including:
- details about our Town Hall event taking place on Wednesday 29 March;
- an update on the progress of the programme and the phase two use cases; and
- an update on the progress of the solution development for the phase one recommendations.
On Wednesday 29 March, the joint transformation programme will be hosting a Town Hall at the FCA in Stratford. In the first part of the event, our senior leadership team will provide an update on the progress of the programme and our future plans for Transforming Data Collection (TDC). During this section there will be an opportunity to ask questions and provide feedback on the programme and any of the information you have heard.
This first part of the event will be hybrid giving attendees the opportunity to attend both in person and online.
The second part of the event will be a showcase and networking session, and will be followed by a drinks reception. Attendees will have the opportunity to see the outcomes of the work that is being carried out, engage with the TDC senior leadership team and network with other TDC stakeholders that are engaged with the programme. Additionally, we will be showcasing more information about the future plans and roadmap for TDC, and there will be opportunity to provide your input and feedback for the work.
The second part of the event will be in person only.
We would encourage you to attend the event in person if you can and pass on the invitation to any relevant colleagues. The programme wouldn’t be possible without the participation and input from industry. It is important to us that you have this opportunity to have your say on the programme, the work we are doing and our plans for the future.
Since our last communication in November, the programme has made good progress. Below is an update on the phase two use cases, the phase one recommendation implementation and our governance groups.
Phase two use cases
Commercial Real Estate (CRE) data
In phase one of the programme, we completed a discovery stage for the CRE use case. The work 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. Due to the criticality of this use case, we decided to revisit CRE during phase two.
The second discovery stage for CRE initially focused on user research to help understand the challenges that firms and Bank users face with the existing processes and business practices. In turn, the team have been able to create user journey maps and identify the key issues that need to be addressed. The discovery work concluded with the drafting of formal user problem statements, which will be used to guide product development. Design work is now underway and the team is working through a series of draft product and service designs.
A project roadmap has been developed outlining how we move through the alpha stage and develop robust solution design options for the consideration of our governance committees.
Strategic review of prudential data collection from solo regulated firms (SRPDC)
Discovery and user research for SRPDC started in November 2022. As part of the user research we have spoken to 34 users from regulated firms, compliance consultancies and the FCA to better understand their needs and pain points. Design artefacts such as end-to-end journey maps have been developed to frame the information we gathered and help communicate what we discovered.
The discovery stage has now completed and the findings have been shared with the industry committees. At the same time, the propositions for the next phase were agreed and the design stage for the SRPDC use case will begin in March 2023.
Retail Banking Business Model Data (RBBMD)
The discovery stage for the RBBMD use case started in January 2023. The data collected on retail banking business models is very valuable for the FCA however, it is costly for firms to provide it on an ad-hoc basis and inefficient to process, analyse and share once collected. Our discovery work will help us to understand how we can better support the needs of users within regulated firms, the FCA and the Bank. We have interviewed users at firms and internal FCA colleagues, to understand the challenges they face and started to create design artefacts to show the user needs and pain points, and to identify opportunities for improvement.
After the discovery work, we will move into the design stage where we will test solution ideas and develop recommendations alongside users. This will include taking on board feedback from the industry committees to produce recommendations which are due by summer 2023.
Incident, Outsourcing and Third-Party Reporting (IOREP)
Mobilisation for the IOREP use case began in February 2023. The first meeting of the advisory group set out the expectations and ways of working for the use case. The discovery and design stage is due to start this month and will run for a period of five months. During this stage the team will be focusing on five key deliverables.
- Gathering internal and industry views on existing processes and policy via user research interviews.
- Exploring options for the delivery of incident and OATP reporting collections as part of the IOREP service.
- Translating initial user requirements into an end-to-end representation of service journey.
- Delivering multiple design options for the IOREP service.
- Following a tender process, a contract has been awarded to a consultancy group that will be working with the delivery team and advisory group for the IOREP use case.
Phase one recommendations
At the end of phase one of the programme, the Bank and the FCA agreed to take forward seven solution recommendations for the Quarterly Derivatives statistical return (Form DQ) and Financial Resilience Survey (FRS) use cases. Delivery of the adopted recommendations is due by July 2023. More information about the recommendations can be found in our publication from July 2022.
Quarterly Derivatives statistical return (Form DQ)
The Bank agreed to take forward three recommendations for the Quarterly Derivatives statistical return (Form DQ) use case. Since our last communication, our expanded team now includes a content designer, user researcher and product designer. Below is an update on the progress made on each recommendation.
Better reporting landing pages and restructured reporting instructions
The team has reviewed usage data across the web-pages to help us better understand how they are currently used. This informed our approach to updating the web-page prototypes. We have recruited research participants from firms and are now reviewing the outputs from the first round.
Counterparty classification standardisation
Our service design team has reviewed the prototypes suggested under this recommendation with industry Subject Matter Experts (SMEs). Following these reviews, the team developed a user journey to demonstrate how the prototypes could be embedded within a firm’s reporting processes. The team held a number of technical teach-ins to understand the potential relevance of other initiatives such as the current review of the System of National Accounts review, and the Office for National Statistics' Inter-Departmental Business Register.
Financial Resilience Survey (FRS)
The FCA agreed to take forward four recommendations from last year’s Financial Resilience Survey (FRS) use case in the form of five new pieces of work. This included some shorter-term tactical changes and some transformative concepts. Below is an update on that work.
Intuitive Form Design
Based on the recommendation for a more intuitive form design, the FCA successfully implemented the redesigned consumer credit return (CCR007) in January 2023. This is a major milestone for the programme as we start to deliver tangible value to firms. The changes included being clearer about why the data was being collected, improvements to the format of the form, easier to navigate guidance and validations with clearer messaging about what action to take to resolve it.
This return is submitted annually by approximately 20,000 firms. To date, feedback from industry has been positive and we have seen a decrease in the call volumes to the FCA in relation to this return. This is despite adding in a number of additional validations and warnings to improve the data quality at the point the data is submitted. We will continue to monitor this ahead of the peak submission in Q2 2023.
This was delivered ahead of the original timeline of May 2023.
We are now working on making similar improvements to another return – FSA038, focused on a different population of firms. We expect the redesigned return to go live by end May 2023. In parallel, we are feeding these changes into how we design regulatory returns going forwards and exploring the scalability of the improvements across existing forms.
Based on the recommendation to take forward discovery for a unified portal for external FCA logged-in systems, the FCA commissioned a discovery to identify opportunities to improve the firm experience. We are in the middle of the user research which is seeking broad engagement across all financial services sectors and different types of users to ensure findings are representative of the wider population of firms regulated by the FCA and the Bank. Options will be shared in Q2 2023.
Firm view at a glance
Based on the recommendation to pilot functionality reflecting regulatory reporting data back to firms, the FCA is in the process of developing a prototype of a Firm View at a Glance. We plan to test the prototype with a small group of firms in Q2 2023. The pilot will initially visualise a single return before making a recommendation on next steps.
Changing the Data Collection Design Process
As a result of lessons learnt from the first phase of recommendations, the FCA has identified a number of improvements to be made to its data collection process. We are now testing the development of a new data collection through this revised process. The process aims to ensure data collections are designed in a proportionate manner, are reflective of both the FCA’s and firms’ needs, and that value can be delivered through data collection before formalising it in policy.
We will feedback on this new approach in the summer.
The Future Financial Resilience Survey
The consultation on the Financial Resilience Survey (FRS) closed on 2 December 2022 and the business area have been considering industry feedback. Further information will be published in due course in line with the existing policy process.
Any implementation of the new collection will be supported by the TDC programme in line with the principles and lessons learned during phase one as part of delivering the Intuitive Form Design changes.
Our programme's governance groups, the Data Standards Committee (DSC) and the Reporting Transformation Committee (RTC), meet on a monthly basis. Their meetings are a mix of formal committee meetings (for discussing major topics and making decisions) and workshops (that help members to better understand and provide more detailed feedback on use case work). Both the DSC and RTC held formal committee meetings in Q1 2023 and attended workshops with use case teams.
Our delivery teams presented updates on the progress of the programme to both committees. Their updates included findings from discovery work on the phase two use cases and progress on the work to deliver the phase one recommendations.
Additionally, the DSC have been discussing the Data Standards Review that they commissioned during phase one of the programme. Ernst and Young (EY) carried out fieldwork for the review in Q4 2022 and produced a draft report of their analysis. Members have reviewed a first draft of the report and are now working with EY to develop an updated draft. We anticipate work on the report will conclude in the coming weeks.
In addition to our committee meetings, the Reporting and Data Standards Transformation Board also met on 23 February. As well as receiving an update on the programme’s work since the start of phase two, members discussed in detail their thoughts on our strategic direction and what they would like to see in future plans for TDC.
The minutes from the recent Committee and Board meetings will be published during March 2023.
Future joint transformation programme communications and updates
Our next communication will be in April 2023. This will include an overview and recording from the Town Hall event. You can find all communications from the joint transformation programme on the Transforming Data Collection page.