OVERVIEW
FINREP is based on the EU’s CRD IV which contains the prudential rules for banks and financial and investment institutions. Looking back at the previous regulatory reporting requirements, FINREP presents a significant new increase in regulatory granularity from the financial data aspect.
Containing over 65 reporting templates, FINREP requires data from the core financial accounting related to the balance sheet figures (Assets, Liabilities, Equity and the Income Statement) and the breaking down and merging of this core data with additional information from non-core data such as collateral and forbearance details amongst others.
THE CHALLENGES
ORGANISATIONAL
The reporting for FINREP, similarly to COREP, involves a process of frequently gathering data which is traditionally found in various silos (possibly across departments), mapping and converting this data to the necessary standards.
OPERATIONAL/TECHNICAL
Having data disseminated across system makes it very difficult to not only prepare FINREP reports but also make use of this data for internal analysis and reporting. Challenges operationally, revolve around actually producing the reports from the previously prepared data and managing the various updates as issued by the EBA through the DPM changes.
Financial Reporting ensures harmonisation and convergence in supervisory reporting is maintained. It applies to all credit institutions that consolidate their financial reports based on IFRS. The templates covered under FINREP include:
These reports have to be filed annually with the National Supervisory Authority of the country.
THE WHO, WHAT, WHEN OF FINREP REPORTING
WHO
CREDIT INSITUTIONS AND INVESTMENT FIRMS ACROSS 31 COUNTRIES IN EUROPE
WHAT
COMMON REPORTS (COREP) AND FINANCIAL REPORTS (FINREP)
WHEN
MONTHLY, QUARTERLY (COREP) AND QUARTERLY (FINREP)
BRSANALYTICS is an effective integrated solution which covers the FINREP reporting requirement from data aggregation, transformation and merging to the final reporting pack to be submitted to the central regulatory government body. The application imports the raw data from various sources, processes and transforms this data; ready to be used by the customer for reporting or any analysis required, thus reducing the burden placed on the organisational and operational level of an institution.
BRSANALYTICS FINREP BUSINESS BENEFITS
IFRS 9
This accounting standard aims to strengthen accounting recognition of loan-loss provisions, valuation of uncertainty and provisions for on and off balance sheet exposures. The idea is to shift towards a higher quality global accounting standard.
IFRS 9 integrates accounting, risk and business which makes it somewhat complex and time-consuming to implement across an organisation and necessitates new processes and IT changes to fulfil new accounting and disclosing requirements.
Implications for the bank are ensuring a smooth accounting internal changeover from IAS 39 standard to IFRS 9 and possibly upgrading of internal financial applications. BRSANALYTICS is a flexible solution which aggregates multiple data sources provided by the bank and provides automatic placement and data population in the FINREP regulatory returns. Our team has investigated the IFRS9 impact on the BRSANALYTICS FINREP solution, and we can assure that from the draft regulations available, our FINREP solution will be made IFRS9 compliant ensuring a smooth transition from one reporting period to the next due to a phased approach to be adopted with the client.
Contact one of our representatives for an appointment and we will be more than happy to answer any questions you may have.