BCBS 239 Data Lineage for Critical Data Elements – Risk Data Aggregation

Background

The client is the US division of a major international bank that was implementing an Intermediate Holding Company (IHC) as part of the Federal Reserve’s Dodd-Frank Enhanced Prudential Standards (EPS). Pursuant to this, the client was also required to comply with the Basel Committee on Banking Supervision’s regulation 239 (BCBS 239), which is “Principles for effective risk data aggregation and risk reporting.” In parallel with this mandate, a program was initiated to establish a data governance framework for the IHC, which would underpin the creation of a data quality management program to enforce that governance once the IHC implementation was complete.

Delv was asked to capture the data lineage that would ultimately flow to the regulatory reports required under the EPS standards. This was the first step to making the IHC’s broker-dealer division BCBS 239-compliant. This effort was also subject to adherence with the new data governance and data quality management guidelines.

Challenges and Solutions

As the IHC division with the most varied and voluminous transactional data, the broker-dealer’s data structure was highly complex. Delv business analysts identified approximately 1,200 critical data elements that were essential for key regulatory and financial reports, all of which were now subject to the newly implemented governance rules. To help apply these rules, Delv helped design a collection template to capture metadata about those critical data elements, including their lineage, owners, permissible values, all transformations being performed on them, and various other descriptors. The model encompassed transaction, position, product, pricing, and organizational reference data, and data derived from those elements.

Execution and Delivery

Delv successfully delivered the metadata repository within project timescales, and then collaborated with the data management office to design and implement a process to automatically flag any coding changes that could potentially affect the data elements, so that the metadata model could be maintained and enforced.

Result

Pursuant to BCBS 239, the client was now able to satisfy regulators that its data governance framework was adequate to support its ongoing regulatory reporting obligations under EPS. In addition, this implementation established a valuable intellectual property asset for the client that would shorten the discovery phase of future projects, while also opening the possibility of rationalizing redundant data and processes in the future.

"I’m so impressed by the quality of people at Delv. They were knowledgeable about our business and made a very complex project much smoother."

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