Common Data Platform: The Granular Data Reporting Journey for Financial Institutions in Japan

Many jurisdictions across the globe have shifted to a granular data collection program. Here are notable regulatory authorities who are moving toward a common data platform:

• Europe: The European Central Bank’s AnaCredit and Integrated Reporting Framework (IReF) aim to standardize and harmonize reporting requirements to reduce the reporting burdens at the bank.
• Australia: Australian Prudential Regulation Authority (APRA) Comprehensive Data Collection (CDC) seeks to collect richer, more granular data for cost savings and operational efficiencies.
• Hong Kong: The Hong Kong Monetary Authority (HKMA) Granular Data Reporting (GDR) program aims to support improved surveillance and policy formation.
• Singapore: The Monetary Authority of Singapore (MAS) Data Collection Gateway (DCG) seeks to streamline the submission process and enhance data quality.
• The Philippines: Bangko Sentral ng Pilipinas (BSP) FRP V15/V16 XML Consolidation and International Transactions Reporting System (ITRS) aims to monitor cross-border transactions and compile balance of payments statistics.
• India: The Reserve Bank of India (RBI) Centralized Information Management System (CIMS) seeks to automate regulatory and supervisory submissions, replacing their existing XBRL system and paving the way forward for "Element-Based Reporting" (EBR) from the existing return-based approach.

Japan is also transitioning to granular data reporting through a phased collaboration between the Japan Financial Services Agency (FSA) and the Bank of Japan (BOJ). As a first step to data-centric regulation, they aim to eliminate the overlaps in their supervisory and reporting frameworks that lead to operational inefficiencies.

The Liberal Democratic Party's Treasury and Finance Division and Research Commission on the Finance and Banking Systems are strengthening coordination of BOJ’s on-site examinations and JFSA’s inspections to integrate data collection into a single platform.

A timeline of their collaboration to date:

• 2020: JFSA and BOJ established taskforce, shared inspection results and conducted joint interviews and data requests.
• 2021: Conducted research on overseas development of comprehensive data collection initiatives.
• 2022: Unified submission destinations to JFSA for approximately 330 common data templates and established a system to share files from JFSA to BOJ. Began a joint experiment to collect corporate loan data at transaction level from 7 major banks and 49 regional banks.
• 2023: Began granular data collection from 7 major banks and 62 regional banks. Began trial data collection from regional banks II. JFSA published results from joint experiment on granular data collection of corporate loan data. JFSA assigned corporate numbers to more than 90% of corporate loan borrowers, linking corporate numbers to firm-specific data and geographic data to assess regional banks’ climate-related financial risks.
• 2024: Published progress report for the “Common Data Platform” which included: data accuracy; operational efficiency; risk identification; data analytics; standardization of data definitions; reconciliation.

Adaptable Regulatory Reporting by Design: 
Advancing Confidently With the Pace of Regulation

As more jurisdictions in Asia expand GDR requirements, reporting firms are increasingly pressured to conform both functionally and technically with complex regulatory changes. Here’s how financial institutions and regulators can overcome these challenges:

• Centralized Data Resource: Establish a clean, unified data source across all risk types to ensure accurate capital, liquidity, and leverage ratio variance calculations under Basel frameworks.
• Adjustment Granularity: Transition from aggregated to granular-level adjustments, increasing the magnitude and accuracy of records and data fields.
• Data Attestation Process: Implement a robust sign-off workflow by responsible teams at the data origination stage to ensure accuracy before reporting.
• Delta Submissions: Enable systems to identify and submit subsets of data for delta reporting and restatements.
• Submission Format Changes: Adapt to evolving regulatory formats such as APL and XML.
• Data Privacy: Apply tokenization and encryption to protect all sensitive information.
• Data Lineage: Maintain end-to-end traceability to validate data accuracy and support anomaly investigation.

• Data Processing: Implement robust data governance frameworks to efficiently handle and analyze the large volumes of data.
• Supervisory Transition: Shift from monitoring aggregated, form-based reports to analyzing a single source of data.
• Balancing Compliance and Innovation: Balance increasing data requirements with fostering innovation in macroeconomic analysis.
• Regulatory Inconsistencies: Standardize non-uniform definitions and data availability across entities, even within the same jurisdiction, to simplify reporting and analysis.

Financial Institutions can mitigate these risks by implementing a granular data reporting framework (GDRF) early in the transformation process. Here’s how:

1. Perceived Higher Implementation Costs

Establishing a GDRF early enables financial institutions to plan data collection and reporting efficiently, avoiding expenses and compliance risks, as well as mitigating contingency costs.

2. Inconsistent, Inaccurate Data

Early adoption enables data quality checks and cleansing, ensuring accurate reporting and reducing regulatory scrutiny.

3. Potential Penalties

Early integration ensures systems are in place from the start, reducing regulatory friction and risk.

4. Reputational Damage

Early GDRF implementation signals commitment to compliance and data-driven decision-making, boosting reputation and investor confidence.

5. Missed Opportunities for Enhanced Risk Management

Early adoption provides richer insights, enabling more effective and forward-looking risk management.
 

Nasdaq AxiomSL, a single integrated enterprise risk and regulatory reporting solution, draws on deep industry experience, technology expertise and fully managed cloud service experience. Around the world, Nasdaq's technology is used by 97% of global systematically important banks, half of the world's top 25 stock exchanges, 35 central banks and regulatory authorities, and 3,800+ clients across the financial services industry.

Contact the Nasdaq AxiomSL team to learn more about implementing a granular data reporting framework to improve data-driven compliance, enhance transparency and reduce risk, enabling financial institutions to scale and grow.
 

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