Data management: securing a banking license

Data compliance for financial optimization

When securing a banking license, the ECB expects a significant volume of data to be archived, covering a wide range of information. This includes detailed documentation on business partners, contracts, collateral, payments, balance sheets, P&L statements, and more. These different domains are called ‘interfaces’. Each interface includes various data elements. It is essential to describe the organizational structure of business partners. Specifics such as interest rates, repayment plans, debts outstanding, and the net present value of unpaid lease installments must be included for contracts. The balance sheet and P&L require extensive information for each GL account, including IFRS classification. In total, nearly 600 data fields are distributed across these categories.

In collaboration with TriFinance, the company launched a comprehensive project to provide detailed financial data to the ECB, bringing it one step closer to its licensing ambitions and an optimized financial framework. As part of this effort, CFO Services project consultant Maxim Van de Vyver joined the Risk team as a Business Analyst for one year. Reporting to the Senior Risk Analyst, he worked closely with various departments, including Accounting.

“A key part of this project involved identifying the data required from the company’s systems and establishing processes to collect it. This involved a detailed review of the various systems and data sources in use,” Maxim Van de Vyver, explains. “It was, for example, important to pinpoint the data sources within the SQL codes.” By identifying these sources, it became possible to determine what data could be extracted from the system. After that, each data field was assessed to see if any calculations were necessary or if integration with data from other sources was required.

Overcoming data challenges

The TriFinance expert analyzed the existing systems to identify relevant data streams and assess data quality. If certain data could not be provided internally, efforts were made to look for third-party sources that could supply it.

Throughout the course of the project, several challenges arose. “One of the primary concerns,” Maxim says, “was central management from headquarters located in a different EU country, which led to communication challenges and delays.”

Distributing this information among all project stakeholders, such as HQ, internal management and third party companies collaborating on the project, proved vital to ensure consistency and promote transparency for everyone involved.

Enhancing data collection and compliance

In response to these challenges, management extended the project deadline by three months. This extension allowed everyone who was working on the project to take the necessary steps to collect and report the required data effectively. It also enabled the refinement of data fields that had yet to be specified. The extra three months allowed a development company specialized in data analytics and IT consultancy to program the already defined data fields.

The project is now in its final testing phase, focused on verifying the accuracy of data extracted from the system. Certain calculations are still required, varying by data field. Some calculations are straightforward, involving a single value per data field. Others are more complex, with interconnected data fields that require more intricate calculations.

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