WELCOME TO THE
OCTOBER 2019
QUARTERLY EDITION OF
THE COREBIS NEWSLETTER

Within this issue of the CoreBIS newsletter, we have:

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The New Age of Regulatory Reporting:
Impacts and Concerns for Executives

Cortell’s CoreBIS team will be hosting an educational afternoon for executives regarding what they can expect in the coming 24 months for their APRA regulatory reporting requirements. Executives need to be in a position of knowledge to steer their organisations through the roadmap of regulatory change.
Planning, budgeting and guiding executive peers and the organisation at large takes a clear understanding of the strategic direction APRA and other regulatory bodies will be taking.

SYDNEY

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Sydney NSW 2000

MELBOURNE

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1 Southbank Blvd,
Southbank VIC 3006

BRISBANE

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Upper Level Eagle Street Pier,
18/45 Eagle Street
Brisbane QLD 4000

Come join us and our guest speakers for lunch and an afternoon of education and fine food. Spaces are strictly limited, so register below. Registration is from 12:00pm, Lunch will be served at 12:30pm

Cortell Exhibits at COBA Gold Coast 2019

Cortell is excited to announce our participation in this years’ Customer Owned Banking Association (COBA) annual event, being held on the Gold Coast. This year’s theme is “Stronger
Together”, a theme that resonates well with Cortell who over our 20-year history has partnered with more than 600 clients to deliver a multitude of award-winning solutions addressing the requirements of reporting, analytics, planning and modelling.

Michael Lawrence, COBA CEO states that whilst the theme “has always been true… it has never been truer as the industry continues to evolve to meet the shifting consumer demands and a heightened regulatory environment.”

Matthew Hill, Director of Cortell: “We see involvement with COBA as a wonderful opportunity for Cortell to continue its successful journey of collaboration with clients to deliver best in breed solutions to address their needs. Cortell’s award winning CoreBIS platform is a testament to the successes that can be delivered when collaboration exists. We also see the benefits of Cortell applications: CoreBase and CorePlan, in meeting  business requirements for better and more robust planning and reporting processes for our customers and are excited to have this opportunity to be represented at the COBA event”.

COBA takes place on November 10th -12th at Gold Coast convention centre.

For the agenda and more information, please visit the COBA website here:
http://coba2019.com.au/

Industry and CoreBIS Updates

Authorised Deposit Institutions
(ADI’s)

Within the ADI industry, Phase 1 of the Economic and Financial Statistics (EFS) appears to have been delivered successfully by most entities (some notable exceptions).
What will be telling is the success rates of entities in delivering to the new requirements as APRA starts to analyse the data and monitor the submissions over subsequent periods of time.

Phase 2, delivered for August, will no doubt have provided greater challenges for industry as they scrambled to create new data points out of legacy systems that are not always so accommodating of change.

What is important to note for not just ADI’s, but all industry verticals are that the release of the EFS forms by APRA demonstrate a distinct move by APRA towards a Standard
Business Reporting (SBR) aligned model of reporting. This can be seen with the concepts of the taxonomy being realigned to subject matter areas, simplifying the process of tagging to the taxonomy.

CoreBIS, being built on SBR, utilises innovative design principles to allow CoreBIS users to tag their business data to the taxonomy via a series of drop-down boxes.
Furthermore, users can also tag groups of data at a more senior level in a hierarchy, facilitating the speed for which data can be tagged.

This not only simplifies the process of tagging but permits users to make changes as their business data and regulatory rules change, without the need for external consultants.

Superannuation

The Member Outcomes reforms within Superannuation are drawing very near with commencement Jan 1, 2020.

The package of reforms is designed to strengthen the strategic and business planning  processes of RSE’s.

The SPS515 standard is split into four areas of deliverables:
1. Strategic objectives
2. Business plan
3. Expenditure management
4. Outcomes assessment

Requiring both a reflective and forward-looking perspective, combined with capabilities to slice-and-dice cohort analysis with internal and external data, the deliverables will no doubt
be presenting some interesting challenges to RSE’s.

CoreBIS Super, with its granular access to client data sets, its analytical capabilities, in-memory engine and write-back capabilities, provides a wonderful opportunity for RSE’s to
deliver against these new requirements.

Life Insurance

Within Life insurance, APRA and ASIC have released their next set of claims and disputes data. Tabular consolidation of these data sets within excel no doubt continuing to provide much manual preparation and reconciliation by reporting teams within Life.

These deep data sets are evidence of the direction APRA are moving with all regulated institutions, as they continue their move towards more frequent and granular sets of data being reported.

Whilst these data sets are not currently contained within the SBR taxonomies, Cortell has embedded these claims and disputes spreadsheets into its custom reporting functionality within CoreBIS. This should save significant time and effort for Life Insurance entities as they leverage the underlying base cube structures of CoreBIS to appropriately map data into these spreadsheets.

The benefits do not stop there however, with CoreBIS’ analytics engine, users will be able to slice, dice and re-use that data for consumption across multiple reporting needs of the organisation, making it an attractive proposition for any Life Insurance entity currently struggling with their reporting.

Private Health Insurance (PHI)

PHI continues to raise interesting prospects for regulatory reporting. Traditional PHIAC forms can be automated within the CoreBIS platform, with all Forms now present with full SBR capability, providing a future proof solution for Health Insurance reporting teams.

The push by APRA to move Private Health Insurance (PHI) towards the LAGIC framework appears both smart and inevitable, with impending AASB17 creating a large consideration for the timing of this initiative.
Either way, CoreBIS is now established for PHI reporting, extending the capabilities of the application and supporting those reporting entities that offer PHI as a product line with their other reporting requirements.

General Insurance (GI)

Except for APRA’s recent $250m capital imposition on one of the large insurers for their risk self-assessment, there is minimal activity taking place that is specific to GI. Of course, many entities will be working through their management of the AASB17 transition, with APRA still assessing the impact from a prudential perspective.

D2A to DCS Transition Update

Across all industries, Cortell continues to be represented on the APRA software development group for the transition of D2A to DCS. The new test environment will be available in Q1 2020 for clients and vendors to use. Whilst test forms are to be released in a staggered approach, it is expected all forms will be available for testing.

What will be the key impacts for Entities?

Whilst not a direct consequence of the DCS transition, organisations will need to ensure individuals have an individual MyGovID. It is important to note:

There will be no organisation MYGovID.

Once an individual has their own unique ID, which remains personal to that person, they can then link themselves to the organisation via Relationship Authorisation Manager (RAM)
which allows individuals to act on behalf of a business within participating government online services.

With the switch to DCS, perhaps the most impact will be seen by those entities that are currently manually copying and pasting data into D2A. A laborious process already, will
be compounded by the restriction to table cell inputs being required one cell at a time, extending the time taken to input and making the exercise and prone to error.

It is however the longer-term objectives of APRA that entities should be addressing whilst they are looking to change their reporting process. This primarily rests with APRA’s move
towards collecting more frequent and granular data sets from reporting entities.

Manual collation of data will no longer be a viable solution for those entities not wanting to be bedded down in compliance.
Those entities that currently map their data to Form attributes will also be left in a legacy state of reporting.

As APRA move towards more frequent and granular reporting requirements, they are going to be calling on the reporting of multi-dimensional data sets to deliver this. To deliver this, entities are going to have to move towards standard business reporting (SBR), and this is where a large majority of reporting entities will become unstuck.

CoreBIS with its underlying multi-dimensional cube structure lends itself perfectly to the multi-dimensional supply of data that APRA will be seeking. Not just for the benefit of APRA, a platform that supports multi-dimensional analysis is a powerful tool for any reporting team. Whilst CoreBIS already contains out of the box market share, movement reporting, trend analysis and graphs, the capabilities of its users to slice and dice data to their own desires provides rich analytical capability for any user.

Another advantageous change to benefit CoreBIS users will be the automatic submission of validation commentary. CoreBIS with its innovative design currently captures APRA validations and updates these each period, with clients able to investigate the queries being raised by APRA and subsequently type in commentary against the query. This unique
feature of CoreBIS will allow automatic submission of commentary to APRA, negating manual rekeying of data and allowing a one-stop shop for commentary capture and control for messaged being sent to APRA.

We look at the benefits of an
Automated Regulatory Reporting Solution

The transition from D2A to DCS, the impact of BEAR, in combination with the fallout of the Royal Commission, is driving entities to consider their existing reporting requirements.

Let’s consider just some of the benefits:

Significant productivity benefits,
reduce FTE commitments.

Save money on 310 audits with
superior governance, audit controls
and risk mitigation.

Move to a data centric model and
assign data stewards within your
business.

Automatically report data quality
metrics from CoreBIS.

Be Standard Business Reporting
compliant, a must for reporting
going forward.

Service BEAR requirements
– give yourself peace of mind.

What you don’t
know about CoreBIS:

Can be deployed on premise or on-cloud with various hosting options to support your company’s IT strategy.

CoreBIS has been designed and built for reporting teams, not for IT teams, meaning reporting teams can manage end to end delivery.

CoreBIS does not require expensive external support resources to bring about change, it can be managed in-house.

CoreBIS deployment cycle is short.

James Corner, Product Manager of CoreBIS state:

“An automated solution for APRA reporting provides far more than the seamless production of your numbers. It is a comprehensive framework for governance and data quality. All too often employees are following process and using reports that have been in place for several years. This leaves both the employee and the organisation susceptible to operational risk issues. With the constructively tough enforcement attitude APRA are adopting, I would encourage employees in this situation to be raising operational risk items to flag their concerns to the Executive.”

Customer Advisory Board

This Quarter will also see the commencement of our Customer Advisory Board (CAB). The CAB will help to steer the features and functionalities that our CoreBIS user group would like to see added to the platform. The CAB membership is available to CoreBIS customers and ensures CoreBIS is an application that extends itself in a collaborative manner to deliver improvements for our customers and addresses their primary requirements.

James Corner, Product Manager
of CoreBIS states:

“In today’s modern approach to system integration and development, Cortell is clearly flying the flag for collaboration with our customers to ensure the strength and benefits of CoreBIS continues with a sustainable proposition. This is further extended through the strategic development group initiative that drives shared value for our clients and will foster a robust delivery of strategic initiatives that are aligned to our customer needs.”

How Can CoreBIS Support your BEAR Delivery

This month sees CoreBIS updated for BEAR.

BEAR has officially gone live for the ADI industry, and on the back of the royal commission; it is soon to be released for the Insurance and Superannuation industries as well.

APRA has very recently been handing down very punitive consequences to some major players in the Banking and insurance space, with both fines and capital restrictions being imposed on those entities where risk is perceived.
It is a clear message to all entities that APRA are no longer going to tolerate mediocrity. The extension of BEAR to institutions within insurance and superannuation, will no doubt leave Executives wanting to challenge all manner of processes within their remit.

As a CFO, CTO, CRO, there is a direct link of BEAR to APRA reporting, be it through delivering, monitoring, approving, reviewing, challenging or escalating tasks within the reporting process. As for CFO’s, typical accountabilities to be found on their accountability map beyond that of APRA reporting include all matters of financial data and reporting,
from budgeting and planning to Market disclosure reporting.

CoreBIS, Cortell’s award winning APRA governance platform, is already supporting CFO’s with the extensive array of accountabilities they face, with examples including:

Capital Management

Have instant reporting of your capital numbers, feed back into your ALCO reporting and Management packs. Understand key drivers for movements in your reported numbers.

Regulatory Reporting

Turn your manual and semi manual processes into seamless reporting, increase productivity and enhance your analytics providing peace of mind.
Save money on the 310 audits.

Liquidity Management

Automatically deliver daily liquidity reporting with the ARF210.5. Readily identify your unencumbered asset position, maturity profiles and contingent funding, with monitoring of movements over time.

Market Risk Management

Leverage data within CoreBIS for monitoring of internal triggers and automated reporting to treasury, risk and finance departments.

Funding Plans

Monitor your funding ratios and triggers.

Market Disclosure Reporting

Don’t manually transcribe data for your disclosure management, automate the production from an approved singular source that removes risk.

Financial Reporting & Accounting

Automate your annual report processes with extended governance, data quality and reconciliations between your regulatory reports.

Stress Testing

Leverage data from CoreBIS and its analytical platform capabilities to give you stress testing within a singular application.

Contact us to learn more about how CoreBIS can support your BEAR accountabilities.

APRA releases report on industry self-assessments into governance, culture and accountability

Following APRA’s 2018 prudential inquiry on the frameworks and practises regarding governance and accountability at CBA, another 36 financial service institutions (across ADI’s, Insurance and Superannuation) where asked to qualify whether the findings established within the CBA report were also evident in their own organisations.

The findings are telling on several fronts. APRA found recurring themes including:

Non-financial risk management requires improvement;

Accountabilities are not always clear, cascaded and effectively enforced;

Acknowledged weaknesses are well-known and some have been long-standing; and

Risk culture is not well understood, and therefore may not be reinforcing the desired behaviours.

Whilst the GFC did do much to improve capital, funding and liquidity management, it would appear operational risk still has significant step change to be made. The dilemma as always, is primarily down to the trade-off between risk and reward, as Boards and Executives choose how much to invest in risk versus investing in top line growth.

In response to these latest findings, APRA is playing their hand in influencing this trade off, as they impose additional capital requirements and fines on many organisations until their governance practises are improved, a direct hit to bottom line returns. It is a stern warning for all Financial Service organisations to address their governance practises.

Perhaps the most worrying of the findings from APRA’s report was the ongoing approach from some organisations to use the self-assessment process:

“As an exercise for APRA rather than an opportunity to drive improvement”. (p8 Information Paper: Self-assessments of governance, accountability and culture)

With organisational culture being heavily influenced by management, such a tick box approach to what APRA is trying to manage and influence organisations to manage themselves, talks volumes to the significant concerns APRA must have with such organisations.

All of this is a timely reminder as the BEAR accountabilities came into force July 1 for ADI’s. Surely it will only be a matter of time before Kenneth Hayne recommendations for the extension of BEAR to other financial service industries comes into fruition.

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About Cortell

Cortell is a Business Performance Management practice who helps customers improve visibility, transparency, accuracy and efficiency for all aspects of the business reporting cycle.

Recently, Cortell was awarded both the IBM Global Business Partner of the Year for Analytics and SaaS Innovation Partner of the Year. Our consultants have delivered 1000+ solutions to 500+ companies in all industry sectors and functional areas.

To find out what Cortell can achieve for you,
contact our Client Services Team on +61 2 9438 3940.