Are there more challenges or opportunities around the new MAS 610?
Recognised as the regional financial hub of Asia Pacific (APAC), Singapore has consistently been paving the way to ensure its financial sector is not only robust but highly adaptable to emerging trends. This is through new regulatory frameworks, investment in new projects, and forging strong ties with neighbouring countries. The MAS 610 is one of such regulatory initiatives proposed by the Monetary Authority of Singapore (MAS) and is scheduled to take effect in 2019. This is with the aim to reinforce the vigour of its regulatory environment. As such, what do banks need to take note of?
What is the MAS 610 Reporting?
The MAS 610 reporting requires banks and financial institutions to submit quarterly, semi-annual and annual reports with more granular data. In simpler terms, this means that more categories of information would be required from banks and financial institutions to include in their financial reports to the MAS for review. This is also said to result in an approximate 75 times greater volume of data collated in various forms of data sets and classification.
The rationale is to allow a greater oversight on reports with higher value of analysis as big data can then be filtered and analysed deeper. This is also in line with the aim to achieve greater operational efficiency and enhanced data quality through intelligent deployment of technology.
What are the opportunities this can bring?
The new requirements in data reporting will bring about a number of benefits to the long term growth of the financial sector, especially in the following areas:
- Strengthening data governance
The MAS 610, as with all regulatory initiatives in Singapore aim to enhance data governance across the financial sector. With rising demand for a unified data model, the MAS is encouraging the adoption of more technology-based solutions to support the sourcing of new or more granular data.
MAS believes that establishing a solid data governance framework provides the foundation for consistent, reliable and useful data, as well as expands the potential for analytics within and beyond MAS. As Singapore continues to fine-tune its management policies, the MAS 610 is a step that the country will be taking in order to lay out clear processes to aid the access, collection and quality of data.
- Higher efficiency and cost-savings with automation
In order to meet the new requirements of MAS 610, it is advisable for banks and financial institutions to embrace new technologies that can assist in data reporting. Given the volume of data that is now expected to be reported, it is arduous and cost-inefficient to rely on manual labour to manage reporting processes.
Through investments in technology, banks will be able to establish a single unified data management platform which will minimise errors in reporting, and enhance accuracy of data sets. This would satisfy multiple regulatory requirements, including the capital reporting and Basel III, management reporting, and BCBS 239 to name a few. This can effectively help to lower the cost of technological change, whilst increasing data quality and consistency alongside automated regulatory reporting.
- Upskilling for existing seniors
Whilst hiring new talent was once seen as a go-to solution to address the city state’s chronic employment problems, upskilling is increasingly becoming an option to retain existing talent in the organisation. This is also due to the difficulty in sourcing for senior candidates with the right skillset in data management, data analytics and even software engineering.
With automation becoming a fast-changing trend within the financial sector, educating the senior management and securing sufficient funding will allow organisations to optimise their compliance model and maximise long-term cost savings. This can also increase loyalty within an organisation, thereby lowering talent cost in the long run.
As an example, OCBC recently rolled out a massive upskilling programme powered by a $20 million (Singapore Dollars) investment to be made available for its 29,000 employees across the world. This is following UOB’s Professional Conversion Programme launch late last year which aims to strengthen the digital capabilities of its employee pool in line with the HR tripartite advisory in its urge for banks to keep up with the impact of technology on the workforce.
What are the above opportunities dependent on?
Adaptability to changes stipulated in the MAS 610 will be essential to reap the opportunities mentioned above. This is in terms of the following:
- Speed of adopting tech
Banks and financial institutions will need to be able to either invest in technologies or examine the use of vendor software to automate regulatory reporting processes ahead of their competition in order to reap the opportunities in the market. This will also determine whether one would be able to comply in time of the MAS 610 launch in 2019.
- Speed of updating various departments
The current MAS 610 reporting is essentially a balance sheet prepared by the finance department. However, this will soon change to include much more operational data from departments such as HR, payments, legal, IT etc.
What are the challenges?
There can be a lot of varying challenges when it comes to regulatory and compliance. Currently, regulatory change has emerged as banks’ top single concern for 2019 according to a new survey by Wolters Kluwer’s Finance, Risk & Reporting business. Why is this so?
- Management and analysis of massive data volume
Being able to generate data down to microscopic levels only matter if it can be aggregated into meaningful packets of information that can be further studied. Data analysts will need to be able to work with the greater influx of datasets and be able to derive deeper analysis that can support the regulatory changes by MAS.
This will be dependent on the ability of banks to support its employees with the right skills and know-hows with training programmes. Nevertheless, this will not come into fruition unless the right tech infrastructure is in place to enable specialists to manage bigger data sets.
- Tech infrastructure
What would be the best form of technology that can help support the organisation’s means to comply with the new reporting requirements? How will it impact the management of data systems within the company? These are questions that banks and financial institutions will need to evaluate before adopting any form of technological infrastructure which can either allow them to reap long term benefits or accumulate shortfalls in the years to come.
- Availability of right talent and support
While upskilling is a form of long-term support that organisations can provide to its employees, hiring and sourcing for the right candidate in the market is also a necessity in a country faced with either a dwindling or limited pool of talent, especially in the level of experience needed.
Nevertheless, Singapore is in a great position to attract talent all over the world as our financial hub continues to grow as one of the most reputable in APAC.
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