This letter is to advise that APRA will shortly commence the first annual review of its data collections roadmap. It also provides additional clarity on APRA’s near-term data priorities to help entities prepare for ongoing engagement and consultation.
APRA’s data change program
In March last year, APRA set out a five-year roadmap for transforming its approach to collecting financial industry data from the entities it regulates. We remain committed to this data change program, which will ultimately modernise requirements for industry and enrich data and insights for APRA, government, peer regulators, regulated entities and other stakeholders.
Underlining this commitment, this year we established a Technology & Data Division to strengthen our capabilities in this vital and rapidly evolving area. We are pleased to further bolster this team with two new appointments who will be key points of contact with industry: Surabhi Jain as Chief Data Officer who will lead data strategy and governance; and Andy Robertson as Program Director for the execution of all projects in the data transformation agenda.
Review of the approach to implementing the data collection program
The ambitious nature of the data change program and its timeline were acknowledged in APRA’s initial Direction for Data Collections Discussion paper and the Response paper, as well as in recent industry communications.
As work on the program has progressed over the past year, we have identified several challenges presented by new technologies and associated with implementing a complex program of granular new data collections. We have gained valuable insights from implementing recent data collections such as the Superannuation Data Transformation, AASB17/PHI Capital, and the updated authorised deposit-taking institution (ADI) capital framework. We have also taken on board feedback from industry through roundtables and the Comprehensive Credit Collection pilot exercise.
As foreshadowed in the December 2022 response paper, APRA now intends to embark on the first annual review of its data collections roadmap. This review will reconsider the pace, sequencing, and priorities of the roadmap, while also seeking to ensure APRA’s data and technology capabilities are aligned with our goals. We intend to provide further information on the outcome of the review in early 2024.
What it means for industry
As APRA undertakes the review, the timing surrounding some industry and cross- industry data collections will change. To provide certainty to industry, an annex to this letter outlines which data collections APRA intends to prioritise over the rest of 2023 and which will be paused. In determining our priorities, we have considered market developments, global regulatory changes and lessons learnt since launching the roadmap last year.
APRA continues to welcome feedback on its direction for data collections and collection roadmaps. Entities that wish to provide feedback on the review or APRA’s near-term data collection focus areas should email firstname.lastname@example.org.
Focus areas for each industry
To provide further clarity to industry whilst the review is underway, the following focus areas are outlined.
Entities should note that ad hoc informal data collections that are currently in place or may be requested by APRA supervisory or risk teams to meet urgent data needs will continue in the interim. Our expectation is that our future collections program will reduce the overall requests and impact to industry.
APRA has now completed implementation of reporting changes resulting from revisions to the capital framework for ADIs, which ensures consistency of APRA’s broader prudential framework with the capital reforms. APRA is conscious of regulatory burden and notes that 24 capital reporting forms have been consolidated to four (4) forms through the introduction of the new capital collection. APRA acknowledges the significant effort and cooperation by entities through the process.
Liquidity and Interest Rate Risk in the Banking Book (IRRBB) data collections
Some data collections are being prioritised to support APRA’s policy priorities for banking and to address data gaps. APRA will engage with industry from August 2023 on the design and approach for collections relating to:
APS 210 Liquidity Risk (ARS 210.0)
APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book (ARS 117.0 and ARS 117.1)
This will include incorporation of any changes to prudential standards into the collection, and migration to APRA Connect.
Economic and Financial Statistics (EFS) definition changes
APRA will consult on a small number of definitions for Economic and Financial Statistics (EFS) collections in H2 2023 to ensure consistency with revised business size definitions introduced as part of the new capital framework. Reporting forms for this collection will remain unchanged.
Points of Presence
APRA will continue its review of the ADI Points of Presence Review in line with Recommendation 7 in the Regional Banking Taskforce Final Report. APRA will seek further feedback on proposed changes to the Points of Presence data collection and publication in a second discussion paper expected late 2023/early 2024.
Comprehensive Credit Collections
Further to APRA’s advice to ADIs issued 2 March 2023, APRA confirms that it will not progress the Comprehensive Credit Collection (CCC) as described in the collection roadmap. The Proof of Concept (PoC) exercise in 2021/2022 with several volunteer banks yielded useful insights. APRA will undertake a review of the PoC exercise to capture learnings and insights from participating banks to inform future collections design.
APRA will work closely with industry on the design of a future credit risk data collection but does not intend to engage with industry before January 2025.
AASB17 / PHI Capital collections
The AASB 17 and PHI Capital collections are being implemented with the first data due for submission in October 2023 against 69 reporting standards across general, life and private health insurance. APRA will continue to support insurance entities as they become familiar with reporting in APRA’s data collection solution, APRA Connect.
APRA and ASIC undertook valuable engagement with industry and various stakeholder groups in 2022-23 and their feedback has contributed to the regulators’ consideration of strategic insurance data collections. Whilst meeting the needs of both APRA and ASIC, these collections will also contribute to a centralised data set to support the work on insurance affordability and availability being progressed by the Government’s Hazards Insurance Partnership (HIP).
Discussion papers will be released this year to further engage general insurers and life insurers on the nature of wider and more granular data to inform the scope of strategic collections. A longer timeframe than indicated in the collection roadmap is required and industry will be consulted on implementation timeframes.
APRA continues to work with the superannuation industry on data collections as part of Phase 2 of the Superannuation Data Transformation (SDT) project. As advised in its May 2023 letter to industry, APRA will not consult on reporting proposals over the peak year-end reporting period.
APRA intends to commence formal consultation in November this year on proposed reporting standards for investments (including indirect investment costs), registrable superannuation entity (RSE) and RSE licensee profile, and RSE licensee financials.
APRA intends to postpone consultation on RSE licensee operations, other reporting standards relating to financial data and cross industry proposals for non-financial risk data collection, which were originally intended to commence in November.
APRA will engage industry on timeframes for consultation on remaining topics, with the intent to confirm timeframes in early 2024. APRA recognises that the Superannuation Data Transformation is already well progressed. APRA will be mindful of the impact on industry and the timeframe for completion of the SDT project when reviewing the roadmap and its timings.
APRA is considering the responses to the consultation on remuneration reporting and disclosure requirements and will shortly release a response paper on disclosure and relevant updates to CPS 511. APRA’s response to submissions for CRS 511.0 Remuneration will be delayed ensuring issues raised by industry are adequately addressed. The associated commencement date will be extended accordingly.
Non-financial risk collections
APRA intends to engage with industry in mid-2024 on the design of a non-financial risk data collection to support supervision of APRA’s policy priorities including and CPS 230 Operational Risk Management, CPS 234 Information Security, CPS 510 Governance, CPS 520 Fit and proper.
The Financial Accountability Regime (FAR) legislation is awaiting Royal Assent. To support early engagement with entities and to enable the timely implementation of the FAR, APRA and ASIC have released a package of documents for consultation. Further industry engagement will follow after the Bill is passed by Parliament and receives Royal Assent.
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