APRA gears up for new data reporting era

The Australian Prudential Regulation Authority (APRA) has released its initial implementation plan for the roll-out of its new online data reporting system, called Data Collection Solution, which will replace its legacy Direct to APRA (D2A) tool.

The prudential regulator earlier this week revealed that it had selected technology developed by Irish software provider Vizor to replace D2A, with IT managed services provider Dimension Data appointed to roll out the solution.

The Data Collection Solution, which is to be used by more than 4,500 financial services entities, is slated for release in March 2020 following a period of testing and training starting in September this year.

According to APRA’s first implementation plan, internal testing and authentication preparation with regulated entities will commence in September, as well as “external readiness monitoring”.

“Readiness monitoring will be based on the readiness checklists provided and will include items such as tracking the successful execution of test cases, setting up authenticated users and the completion of relevant training modules,” APRA’s implementation plan states.

“APRA will engage with entities that are lagging to understand any key issues and provide additional guidance and support as required.”

It expects entities to start iterative testing of the new solution in October, and by December, they will be checked on the progress of their “readiness” to adapt to the new tool by the go-live date.

During the testing period, entities will be able to test features and functions such as logging in, submitting and resubmitting returns using their own data, and choosing a range of submission methods.

“Data uploaded in the new Data Collection Solution test environment will be secure and will not be accessible by other entities using the same environment,” APRA’s implementation plan states.

As the test environment will likely be integrated with the yet-to-be-released myGovID authentication tool, which will replace AUSkey, the plan notes that entities will need to obtain their own myGovID credentials to be able to conduct testing later in the year.

Training modules will be released by APRA in February next year, and entities will also be assessed on their readiness at that point.

Regulated entities will be required to begin submitting their returns using the new Data Collection Solution in March when the tool goes live.

“Entities need to be ready to use the new Data Collection Solution by the go-live date to ensure their reporting obligations are met. This is essential because no returns will be accepted outside the new Data Collection Solution after the go-live date,” the implementation plan states.

The prudential regulator had previously admitted that D2A has become “increasingly challenging for both industry and APRA to use and maintain” and that replacing the system is part of its “broader data modernisation program”. It said last year that it wanted a new solution that would result in “improved usability, productivity and efficiency gains, lower cost of change, and reduced maintenance costs”.

Earlier this week, APRA’s executive general manager for risk and data analytics, Sean Carmody, said: “We are confident this partnership [with Vizor and Dimension Data] will deliver a robust solution that will allow financial companies to report data to APRA more quickly, efficiently and accurately.

“Reliable data is critical for monitoring the institutions APRA supervises and to allow APRA and other agencies to protect the Australian community by ensuring the stability of the financial system.”

In its implementation plan, the prudential regulator reiterated that it would be working more closely with ASIC on data collection and sharing activities, which commissioner Kenneth Hayne warned in his final royal commission report would be critical to avoid further enforcement failings.

“Although APRA and ASIC’s specific data needs vary with our mandates, there is significant overlap in the data required, and by partnering on data collection topics of joint interest, the regulators will work to minimise the collection burden (including the collection mechanism) on entities,” APRA’s implementation plan states. 

“The pilot approach is a useful preliminary step for both regulators and reporting entities to learn about the challenges and benefits of more granular data collections.”

 [Related: APRA consults on BEAR obligations for smaller ADIs]