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Banking Compliance Issues in Philippines to be Addressed with Single XML File Submission

The Bangko Sentral ng Pilipinas (BSP) has announced a major overhaul of its regulatory reporting requirements for the banking sector, aimed at improving automation and strengthening surveillance. Starting next month, banks will no longer submit 18 separate templates and Excel files, but instead, a single XML file.

Improved Data Collection and Processing

According to BSP Deputy Governor Chuchi Fonacier, the move is part of the central bank’s efforts to improve data collection and processing. “Before, banks would have to submit 300-plus schedules in varying complexity, with voluminous data points,” she said. “Now, with the use of the XML format, we were able to reduce the 300 schedules to a single file.”

New Submission Mechanism

The new submission mechanism will require XML for FRP and FRP-related reports, which will also be consolidated into one XML submission format. Excel-based report submissions will no longer be allowed.

BSP’s Improved Validation and Processing Mechanism

Fonacier said that the processing of report submissions will be significantly improved, with validation of XML files and test scenarios reduced to less than a minute, compared to about an hour previously. “The significant shift that is taking place in BSP data collection mechanism redefines the operating model for financial institutions,” said Subbaiyan Vaithinathan, head of financial regulatory products for Asia Pacific at Adenza.

Improved Reporting Workflows

Adenza, a specialist provider of regulatory reporting solutions, has handled similar changes for banks in other jurisdictions globally. The firm believes that such initiatives present significant opportunities for financial institutions to enhance their end-to-end reporting architecture, addressing current needs as well as the desired operating model.

Parallel Run and Live Submissions

The FRPv15 parallel run will start in April, covering the March 2023 quarter-end reports and month-end reports for second quarter. During this period, banks will be able to use an XML converter facility provided by the BSP to facilitate reporting, but this facility will no longer be available once live submissions start.

Future-Proof Operating Models

Philippine banks are seeking to achieve a future-proof target operating model for overall regulatory reporting, to ensure they can address changes from the BSP, such as more validation requirements or increasingly granular data which may later be required under the new API-based submission mechanism. XML-based reporting will allow for a more streamlined process for updating the BSP’s requirements, whether new data needs to be reported or certain data is discontinued.

Statistics will be generated more quickly, enabling the regulator to access more up-to-date information for its various financial surveillance systems, report generation and management decision-making processes.

Upcoming Industry Roundtable

For more information on the move to FRPv15 and related impacts and opportunities, join Regulation Asia and Adenza’s industry roundtable over lunch on May 11, 2023. Email email protected for more details.