The Seventh Day of BCBS 239: Flexibility

By Stephen Engdahl | 12 December 2014

In baseball, the seventh inning stretch gives the spectators and players a chance to take a brief break and stretch out. So in G. Sibley’s quest for BCBS 239, this seventh day is a great day to explore flexibility.

We don’t know today exactly where the next crisis might come from – failure of a counterparty, failure of a government, disruption of a particular asset type or currency, or something else. Good risk data aggregation methodologies must enable analysis along any particular dimension.

  • BCBS 239 Principle 1 states that aggregation must be unaffected by group structure, legal organisation, and geographical presence.
  • BCBS 239 Principle 4 states that data must be available by business line, legal entity, asset type, region, industry and more groupings, across the banking group.
  • BCBS 239 Principle 6 states that data aggregation must be flexible, to adapt to both user needs and to future regulatory changes.

This means hard coding won’t work and neither will inflexible legacy architectures. To be effective, all the relevant information must be standardised, linked, and classified in advance, so that it is ready-on-demand to be rolled up along whatever dimension the risk practice requires in order to make timely decisions.

BCBS 239 also addresses flexibility of the end-user experience – principle 6 states that data aggregation must offer customisable dashboards and exception reports, and allow drill-down as needed. Analysis and reporting tools need to be able to tell the story from a business perspective.

Look out for day eight next week.

By Steve Engdahl, SVP, Product Strategy, Goldensource 


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