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Podcast: central banks’ data models going granular

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Central banks should phase in more granular regulatory data collection so as not to put too much of a strain on the financial industry, according to Central Banking’s latest podcast.

Ryan Flood, chief technology officer for Vizor Software at Regnology, noted that most regulatory data models were now granular. But going granular, he says, is on a scale.

“Traditionally data was collected at an aggregated level but those levels are generally aggregated many times. So going granular is really determining how many levels of aggregation you want to remove from your data,” he says.

Flood notes that central banks should not change their data management frameworks overnight and instead should look to adopt an approach where granular data is phased in.

“This is not just sensible from a cost perspective but also considering ease of adoption and the impact the change will have on the industry,” he says.

The best approach, he explains, is to integrate more granularity to reporting as “natural” changes occur.

One example of a regulator that is successfully making the change to more granular data is the Australian Prudential Regulatory Authority.

Apra partnered with Vizor in 2019 and has slowly overhauled its data management framework. Flood notes only a few of its data collections have become more granular and has plans to schedule in more granular collection over the next few years.

In response to regulatory shifts that have occurred since the financial crisis, Flood notes regulators and central banks have almost doubled their headcounts in order to deal with the new responsibilities thrust upon them.

“Central banks need to look at technology and solutions to help with these challenges, and approaches like granular data, and more automation and, of course, better data management, to ease the resourcing burden,” he says.

Index

00:00 Introductions

01:04 Data lifecycle

03:25 Weaknesses in current data models

07:00 Designing new operating models

11:00 A data transition

13:40 Investing in people

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