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  • Writer's pictureThe Bluemetrix Team

Decoding BCBS 239 Compliance with Bluemetrix

Navigate the complexities of BCBS 239 compliance and achieve regulatory success with Bluemetrix. This blog post unravels the fundamental aspects of this regulation and provides best practices to expedite implementation for your organisation.
Decoding BCBS 239 Compliance with Bluemetrix

In the fast-paced world of global finance, regulatory bodies are increasingly focused on managing risk and ensuring data quality. One of the top priorities for financial services sectors seeking to meet regulatory standards is compliance with BCBS 239. However, risk and governance executives constantly face obstacles in achieving and maintaining compliance due to disparate IT systems and reliance on manual workarounds.

Whether you're new to the regulation or looking for a proven solution, this blog post will unravel the fundamental aspect of BCBS 239, common reference architecture patterns, and best practices that help you achieve compliance success quickly.

What is BCBS 239?

BCBS 239, also known as the Basel Committee on Banking Supervision's Standard 239, is a comprehensive set of 14 principles geared towards improving governance and infrastructure, in addition to their risk data aggregation and reporting capabilities. Initially published in 2013, it applies to Global Systemically Important Banks (G-SIBs) and Domestic Systemically Important Banks (D-SIBs).

While BCBS 239 does not impose sanctions for noncompliance, regulatory bodies are still meticulous in assessing an institution's standard implementation. As such, it is critical for banks to incorporate it into their regulatory transformation programs.

Failure to comply with BCBS 239 can result in several consequences for banks:

  • Increased regulatory scrutiny from watchdogs

  • Reputational impairment leads to customers' and investors' attrition.

  • Financial losses due to poor risk management and decision-making processes.

  • Legal and regulatory action with potential fines or other penalties

Who does BCB239 protect?

At a high level, the implementation of BCBS 239 bolsters the safety and stability of the banking sector, shielding its stakeholders – such as shareholders, investors, customers, and counterparts – from various risks. Through enhanced transparency regarding risk profiles, regulators are better equipped to conduct thorough systemic risk assessments which promote the long-term health of the sector.

Adherence to BCBS 239 compliance not only offers greater protection for banking stakeholders but also provides financial institutions with multiple competitive advantages. These range from improved efficiency to increased profitability, as well as reduced chances of incurring losses and more effective strategic decision-making processes. All these benefits can contribute significantly towards boosting investor confidence in the banking system and minimising any potential economic losses.

BCB2S239 key principles

BCBS239 encompasses 14 best practices, with 11 targeting banks and the remaining three principles catering to the national and regional regulatory bodies.

Principle for Banks:

Principle 1: Governance framework and Robust data architecture and IT infrastructure

Principle 2: Robust data architecture and IT infrastructure

Principle 3: Accuracy and Integrity

Principle 4: Completeness

Principle 5: Timeliness

Principle 6: Adaptability

Principle 7: Accuracy

Principle 8: Comprehensiveness

Principle 9: Clarity and usefulness

Principle 10: Frequency

Principle 11: Distribution

Principles for National and Regional Regulatory Bodies

Principle 12: Supervisory review, tools and cooperation

Principle 13: Remedial actions and supervisory measures

Principle 14: Continuous improvement

BCBS 239 Key Principles
BCBS 239 Key Principles

Common reference architecture patterns and solutions

Incorporating BCBS 239 compliance within a reference architecture stands as a pivotal stride for any financial institution striving to meet the standards outlined by BCBS 239 principles. Despite some progress made since its initial introduction, the BIS revealed in a 2019 compliance assessment that many G-SIBs still lag behind in conforming to BCBS 239's requirements due to their reliance on outdated, manual processes.

Bluemetrix presents an improved solution to this problem by offering automated capabilities that facilitate the adherence to the first seven core principles of BCBS 239 – from data and processes to business and regulatory requirements. By leveraging data automation technology, Bluemetrix Data Manager (BDM) can effortlessly collect information from diverse sources, consolidate, cleanse, and transform it into easily digestible reporting insights within a strict timeframe.

Principle 1: Governance framework and clear roles and responsibilities

The deployment of an automated governance and meta-management tool to capture, store and oversee the business and technical metadata for data assets becomes imperative. This feature facilities data lineage, data quality management, and data traceability, all integral to BCBS 239 compliance.

With a repository of pre-configured content encompassing policies, data categories, critical data elements and more, BDM empowers the risk management team to build and operate a solid data governance framework. This entails defining and enforcing data governance policies and standards, enabling stakeholders to respond systematically to and handle data breaches appropriately.

Principle 2: Robust data architecture and IT infrastructure

Creating a strong data & IT architecture presents a multifaceted challenge. The integration of multiple standalone components often leads to fragmented systems that lack coherence. In response to this concern, Bluemetrix offers a comprehensive solution with over 150 out-of-the-box integrations across key IT systems in the market, including AWS, GCP, Azure, Hadoop, Databricks, Teradata, Collibra and more.

By leveraging these integrations, the capacity to aggregate and automate data operations across the necessary infrastructure is made attainable.

Principle 3: Accuracy & Integrity of data

Data quality forms a foundational pillar of BCBS 239, essential for generating accurate and complete risk data. The provision of visual evidence for auditors and streamlining the error-resolution process during reporting hold significance.

Bluemetrix presents an all-encompassing, no-code solution with extensive data lineage and traceability, facilitating the monitoring of data source, transformation and movement throughout the entire data lifecycle. This functionality ensures the integrity and accuracy of reporting. Connections between data elements and business concepts are established by leveraging both business and technical metadata, offering a clear understanding of the relationships within these data.

Capturing Lineage across multiple pipelines for a destination report
Multiple pipeline lineages contribute to a final report. BDM can read external lineage data via API for the report.

Principle 4: Completeness of data

To comprehensively capture and aggregate all risk data across the banking group, considering various aspects like business line, legal entity, assets, industry, region and other groupings. BDM facilitates both business and IT users to precisely define and extract specific data details for analytical reporting and output. It offers granular-level data and summary entities to aid risk data aggregation.

Our platform ensures robust and reliable risk data aggregation capabilities by swiftly and accurately tracking data flow from source to target, including all intermediate stops along the way. This seamless tracking ensures the production of data that aligns with stratified requirements, supporting informed decision-making and comprehensive reporting.

Principle 5: Timeliness of risk data

Bluemetrix understands the importance of collecting, aggregating, and promptly reporting data. Our automation capabilities serve as an accelerator, enabling the data team to efficiently gather and deliver risk data within specified timeframes to fulfil reporting obligations effectively. Manual procedures may introduce potential delays and impede your ability to respond promptly in critical situations.

Bluemetrix's automation tools facilitate the implementation of reporting requirements, data aggregation, and timely presentation. By clearly defining reporting requirements and linking them to the relevant IT components, it becomes easier to identify the necessary information and promptly implement it.

Principle 6: Adaptability of risk data

BDM offers a wealth of content covering a wide array of regulations, including Basel, GDPR, and more. The detailed layers within the content allow users to navigate to their required level easily. This comprehensive coverage caters to both prescribed regulatory requirements and ad-hoc reporting. Additionally, BDM is highly adaptable and can be customised to fit your specific use case within your big data environment. Regular releases are released to reflect new banking industry regulations. If required, the modules of BDM can be further customised upon request.

Principle 7: Accuracy of risk data

When relying on manual processes, there is a higher likelihood of errors in accuracy and completeness, particularly during times of crisis. As data volumes and users increase, the risk of unauthorised access also grows. Data teams face the challenge of navigating extensive audit data across multiple external systems.

Given the complexity of this data landscape, it is vital to have comprehensive data coverage and granularity to maintain accuracy. The ability to drill down into reporting allows teams to define the necessary level of detail.

Bluemetrix underscores the indispensable role of automated data lineage tools in fulfilling BCBS 239 compliance. Our solution guarantees that even the largest datasets consistently reach business and reporting applications in the correct format and in a timely manner. This capability ultimately empowers data teams to capture compliance for critical data elements easily. By utilising detailed lineage and reporting, your team can resolve & mitigate risks related to data aggregation and reporting, maintaining dependability even in high-stress scenarios.

Why Intelligent Data Automation?

Financial institutions striving to achieve and maintain BCBS 239 compliance can benefit from harnessing the power of Bluemetrix's data automation capabilities.

  • Efficient Data Management: Bluemetrix provides a centralised platform that streamlines data collection and distribution, ensuring efficient data management.

  • User-Friendly Interface: The platform is designed to be user-friendly, allowing governance personnel to easily create and implement comprehensive data policies without the need for extensive documentation or coding.

  • Compliance with BCBS 239 Principles: Bluemetrix adheres to the first seven principles of BCBS 239, ensuring compliance with industry regulations and promoting a culture of risk management and data governance.

  • Promotes Growth and Efficiency: By implementing Bluemetrix's solution, businesses can achieve growth and efficiency by effectively managing their data, reducing manual efforts, and ensuring data accuracy and timeliness.

  • Seamless Digital Experiences: Bluemetrix enables businesses to build and secure seamless digital experiences by providing reliable and accurate data for decision-making processes.

BCBS 239 Compliance in Practice

Bluemetrix Data Manager provides financial institutions with an invaluable tool for meeting BCBS 239 compliance requirements while building capacity for risk management, data governance and digital experience optimisation. With the help of this powerful automation technology, businesses can unlock growth opportunities while ensuring the accuracy, timeliness, safety, security and consistency of their data - all at once.

*Disclaimer: This article is for risk managers, data governance and engineering teams addressing BC239's9’s data-intensive requirements. It showcases the Bluemetrix Data Manager and Control-M as best practices. The patterns presented are options provided by Bluemetrix to aid compliance with the first seven principles of BCBS 239. Note that this article does not provide legal advice. Customers should review applicable privacy requirements and consult internal privacy and legal teams to determine suitable & acceptable data solutions. Bluemetrix does not guarantee compliance with any legal or regulatory requirements before, during, or after an engagement.


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