Digital Finance: EU Commission strategy paves the way for modern and streamlined supervisory data reporting

The European Commission has presented on 15th December 2021 a new strategy to improve and modernise financial supervisory reporting in the EU. The strategy's main objective is to put in place a system that delivers accurate, consistent, and timely data to supervisory authorities at EU and national level, while minimising the overall reporting burden on financial institutions.

This will ultimately benefit citizens, through more efficient and agile supervision that ensures the stability of the financial system, market integrity, and investor protection. It will also help companies by reducing the reporting burden where possible.

This strategy will contribute directly to the objectives of the European Data Strategy and the Digital Finance package to promote digital innovation in Europe. Moreover, this strategy contributes to the objectives of a Capital Markets Union and helps to achieve a single market in financial services. 

There are four main building blocks in this strategy:

• Ensuring consistent and standardised data that relies on clear and common terminology, as well as on common standards, formats and rules.
• Facilitating the sharing and re-use of reported data amongst supervisory authorities by removing undue legal and technological obstacles to avoid duplicative data requests.
• Improving the design of reporting requirements by developing guidelines based on best practices in applying better regulation principles in supervisory reporting.
• Putting in place joint governance arrangements in order to improve coordination and foster greater cooperation between different supervisory authorities and other relevant stakeholders, allowing them to share their expertise and to exchange information.

Although this is more directed at supervisory authorities rather than at business information providers, it is important to monitor what’s happening there because it will trigger some standards, terminology and data formats which may be used in the ESAP too. For example, a “common data dictionary” is evoked which will need to be seen in conjunction with financial and non-financial reporting items requirements.