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Transformation of the Banking Industry with Automated Data Flow

How Does Automated Data Integration and Reporting help Banks Explore a Data-first Approach?

Over the years, the Indian banking industry has been transforming constantly. The Reserve Bank of India (RBI) has mandated various new technological upgrades. This is mainly to help Banks to improve the management of assets and liabilities. Notably, this has made Banks better at framing strategies for corporate vision and goals.

One such mandate, Automated data flow (ADF) ensures that banks conduct businesses fairly, transparently, and responsibly. Automated Regulatory Reporting offers regulators better offsite supervision. It improves FIs' data integration efforts and accelerates data sharing from lending systems using a straight-through reporting process (STP).

While improving the regulator's data visibility, the method benefits both decision-makers too. The comprehensive reporting method ensures that Banks meet current-day reporting standards. Additionally, it allows the same reports to provide well-structured data for business strategy.

Automated Data Flow (ADF) Solutions equip Core Banking Systems with modern data capabilities. The step to mandate it is a strategic move for a technology-driven data collection approach, aiming to achieve 100% automation for data flow.

Which Banking Reports Can be Automated Today?

Banks have to submit a set of 222+ regulatory reports at varied frequencies to the RBI. These reports fall under 12 categories:

  • Financial Statements Analysis

  • Basic Statistical Returns

  • Department of Banking Supervision (DBS) Returns Analysis

  • Foreign Exchange and International Operations

  • Statutory Returns Analysis

  • Risk Management

  • Delinquency and Collections

  • Treasury

  • Reconciliation

  • Fraud

  • Advances

  • Deposits

Regulatory Climate in India | The Past and the Future

Currently, the reporting process within the existing scenario is complex and most Banks need time to smoothen the process. This is mainly because the task of modernizing legacy banking systems comes with the added responsibility to create a comprehensive data-first environment for purposes like internal reporting, credit monitoring, market research, and effective supervision.

Formerly, Banks submitted regulatory reports manually. It raised issues with audits as the end product had inefficient and uncleaned data. As per the ADF mandate, RBI asked Banks to create a central data repository (CDR) that works as a data warehouse harboring granular data from every banking data source system.

As the data is stored as per data definitions provided by regulators, the same data also suffices for internal insights making it important for Banks to look into every possibility to utilize the centralized data. The first stage requires timely solution deployment, seamless integration of a CDR, and maintenance of data cleansing processes.

For the second stage, Banks need robust internal corporate governance specifically for regulatory reporting. Internal audit processes should be tightened, avoiding third-party vendors from handling the maintenance of ADF once the automation exercise is completed. An internal ADF maintenance team should be in the picture that handles the dynamic nature of reporting requirements.

In recognizing technology upgradation as a process that helps RBI, it is expected of them to issue clear and exhaustive guidelines for all regulatory reports. They are required to establish defined channels and processes for member Banks to deal with queries on reporting.

The regulator is also expected to be more flexible in terms of timeframes for automation of regulatory filings.

Get in touch with D2K Banking Fintech Consultancy Experts for more information on roadmaps for deploying technologies for comprehensive data analytics.


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