Industry Leaders Discuss BCBS239 Compliance and ECB's New Guidelines on RDARR

On May 21^st, 2024, Avantage Reply, organized an insightful luncheon on "BCBS239 – A Renewed ECB Priority" to discuss the European Central Bank's (ECB) final guide on Effective Risk Data Aggregation & Risk Reporting (RDARR) issued on May 3^rd, 2024. The gathering brought together industry leaders, regulatory experts, and professionals from Belgium and Luxembourg to share lessons learned and best practices on implementation.

The event began with a keynote address by Giancarlo Pellizzari, ECB's Head of Banking Supervision Data Division, on "RDARR Initiatives at the ECB: Where Are We Going in Terms of Data Quality," emphasizing the increased focus on data quality in supervisory reporting and the importance of raising awareness at the C-level within banks regarding the quality and production of supervisory reports. Mr. Pellizzari provided an update on the ECB's Management Report on Data Quality, which was initially introduced as a pilot and has now become mainstream, aimed at enhancing management awareness about data quality. Notably, the Management Report must be signed by at least one member of the bank's Management Body.

Freddy Gielen, Executive Partner, Avantage Reply facilitated a question and answer session, giving ca. 30 financial institutions in the audience the opportunity to seek further insights from Mr. Pellizari, covering future developments (e.g., IReF) as well as the scope of application of BCBS239. Following the keynote, a dynamic panel discussion titled "BCBS239 - Translating Regulatory Requirements into Actionable Practices" took place, where Gwenael Gavray, Partner, Avantage Reply was joined by professionals from Banque Internationale à Luxembourg (Arnaud Waxweiler, BCBS239 Program Manager), BNP Paribas Fortis (Yves Baert, Credit Data Manager & Caroline Blaimont, Head of Data Regulatory), Euroclear (Pierre Delville, CDO), Quintet (Eric Mansuy, COO Luxembourg & Head of IT Group ) to discuss best practices and challenges faced by financial institutions in BCBS239 implementation.

Key discussion points from the panel included:

• Mobilizing the Whole Bank for BCBS239: Emphasis was placed on the importance of an ambitious training program and involving Executive Committee members to foster a strong risk culture throughout the organization (i.e., "the tone from the top is a critical success factor").
• Defining and Rolling Out BCBS239 Programs: Insights were shared, highlighting the need for a scalable approach and focusing on critical reports for compliance.
• Choosing an Operating Model for Data Governance: Various models (Centralized-Decentralized-Federated) were discussed to ensure data quality and governance across the bank.
• Maintaining Compliance Over Time: It was highlighted that compliance with BCBS239 is an ongoing process, requiring continuous adaptation as systems evolve and new reports and processes are introduced.
• Challenges of Outsourcing: The complexities introduced by outsourcing (including intragroup) were addressed, particularly regarding data governance and quality controls, emphasizing that outsourcing is a common practice in the banking landscape.
• IT and Business Collaboration: Successful BCBS239 programs rely on strong collaboration across all departments, not just within IT. Ensuring data quality and finding the right internal data steward were noted as crucial.

The event concluded with a light lunch and networking session, providing attendees with an opportunity to discuss the presentations and form valuable connections within the industry.