BCBS 239 compliance: A catalyst for effective change

It’s the end of May 2016 and as the BCBS 239 deadline is now five months overdue, banks are still asking what approach towards compliance will prove to be the most effective. Some banks have taken a methodical and timely ‘check-the-box’ approach whilst some have viewed the regulation as an opportunity to thoroughly strengthen their underlying governance, architecture and data quality.

To first understand the logic behind both strategies, it’s worth revisiting what the regulation is and how it came to be. Back in January 2013, the Basel Committee on Banking Supervision published the BCBS 239 principles for effective risk data aggregation and risk reporting, in response to the lessons learned during the 2007 global financial crisis.

Times of change

The pace of change in the financial services sector seems unprecedented. Traditional business models are being dismantled at a rate that, for inflexible incumbents, must be alarming. It is not solely that enabling technology is hurtling forwards, it is also to do with the bigger picture of low margins, heightened customer expectations and increased competition.