The Irresistible Approach of Granular Data Reporting – What Will It Mean For UK-Based Banking Entities?

The contents of this blog are for general information purposes only and do not constitute legal advice. Association of Foreign Banks disclaims liability for actions taken based on the materials. Readers should consult their legal advisers.

In my previous blog “Transforming Regulatory Reporting”, I wrote that one of the principal factors that will impact the UK banking industry is granular data reporting. Initiatives around granular reporting signal a move away from template-driven submissions: a move shaped by both domestic regulatory reform and global supervisory trends. As financial stability, capital adequacy, and market transparency remain the foci of current and upcoming UK and EU financial regulations, the ability to capture, validate, and deliver granular data is becoming an operational necessity.

Granular data reporting means providing regulators with detailed, data record level information about individual transactions, exposures, and positions rather than submitting pre-aggregated totals on standard forms. This approach gives regulators increased visibility into institutions’ activities and risks while offering firms the chance to improve their data quality, reduce duplication, and streamline compliance. Alongside this shift, advances in artificial intelligence (AI) offer the promise of automation of data review, validation, and the generation actionable insights from previously siloed regulatory data sets.

Why Granular Data Reporting Matters

Traditionally, banks have prepared regulatory returns based on templates and spreadsheet formats that aggregate high-volume data into reported totals. As regulations evolved, the process grew more complex, with changes in underlying rules demanding costly template redesigns as well as frequent checks and reconciliations between reports.

This approach often resulted in:

• Duplication and Inconsistencies: Similar data is reported through multiple templates, with slight variations in definitions, which can lead to reconciliation headaches, errors and potentially the arrival of a section 166 from the regulator where persistent inconsistencies are detected.
• Limited Supervisory Insight: Aggregate figures mask risk concentrations and emerging trends, making it harder for regulators to detect vulnerabilities in a timely manner.
• Operational Inefficiency: Manual intervention in the process slows the reporting cycle and diverts skilled compliance resources away from higher-value analysis as well as potentially introducing operational risk.

Regulatory Initiatives Driving Granularity

UK regulators, recognising these issues and monitoring developments in other jurisdictions, have established the Future Banking Data (FBD) initiative advocating the data management principle of “collect once, use many times”. This means banks submit full, detailed data sets—such as loan-level exposures, individual trades, and precise customer metrics—enabling authorities to produce whatever analysis or report they need and to change the statistical parameters used without imposing on the industry.

The following drivers have also given impetus to granular reporting:

• Transparency: New capital and market disclosures require deeper detail to assess financial stability.
• Efficiency: Redundant templates and potentially opaque definitions across returns can increase time and cost for both banks and regulators.
• Resilience: Granular reporting underpins stress testing and scenario analysis, making it easier for supervisors to evaluate firms under adverse conditions.
• Regulatory Innovation: The PRA and FCA are exploring API-driven platforms and machine-executable rules to validate and process granular submissions.

IReF – A real world example

One of the examples of granular data reporting is the European Central Bank’s Integrated Reporting Framework (IReF) which may anticipate at least some of the components of any UK roll out of this kind of approach.

The main driver for IReF is the harmonisation of statistical reporting across the Eurozone rather than banks having to accommodate multi-jurisdictional requirements of reports across various National Central Banks (NCBs). Although this clearly isn’t an issue within the UK market, it would be an advantage to any bank reporting in both the UK and the EU if there were consistency in data standards across both areas, so it’s worth considering the practicalities and benefits of IReF.

Banks will be required to submit granular, standardised statistical data covering components such as balance sheet items, interest rates, securities holdings, and bank loans, consolidating several existing frameworks into a single regime. The framework will not initially cover payments or money market statistics. The requirements will:

• Apply proportionality, reducing smaller banks’ reporting burden.
• Require banks to upgrade IT and data management systems to handle integrated, more granular submissions.
• Replace diverse national reporting templates with a harmonised cross-country standard.

Implementation Timeline

• The latest timeline sets full adoption for the fourth quarter of 2029, with reporting beginning after a one-year pilot phase planned before the actual implementation.
• A detailed implementation plan was due in late 2025.
• Banks are being encouraged to start preparing now by reviewing business processes, upgrading systems, and engaging in early testing and feedback rounds.

Benefits for Banks and Regulators

The intent of IReF, in common with all granular reporting, is to confer some specific benefits on both banks and regulators.

For example, for banks:

• Reduced Reporting Burden: Fewer and more harmonised data reports, reducing replicated national requirements and overlaps.
• Lower Costs: Standardisation contributes to automate reporting, reducing manual effort and long-term operational cost and risk.
• Operational Efficiency: Streamlined, harmonised processes across countries, especially beneficial for banks operating across jurisdictions.
• Technological Advancement: Drives universal adoption of improved data management and reporting technologies.
• Greater Flexibility: Simplifies expansion and servicing of multi-jurisdictional clients.

And for regulators in the following areas:

• Data Quality and Consistency: Cleaner, consistent data unlocks better oversight and risk analysis, raising stability and transparency.
• Efficient Supervision: Reduced number of ad-hoc requests, and easier cross-country comparisons and aggregation.
• Regulatory Simplicity: Supports goals for regulatory rationalisation and competitive financial markets.

The UK regulators may choose to pursue a similar course in making their first move in the area of statistical reporting as this may represent an achievable first building block of the initiative.

Current Relevance to International Banks in the UK

Given that there remain no equivalents of IReF in the UK, and no concrete timelines for granular reporting from the regulators, why should banks based in the UK give any consideration, not to mention budget, to preparing for what is essentially conceptual rather than material?

Although the regulator has yet to publish any definite plans, the momentum of granular reporting across the globe is becoming irresistible for the industry in the UK. The PRA and Bank of England’s Future Banking Data initiative, with ongoing reviews and consultations about how reporting should evolve, will inevitably result in tangible outcomes in the near future.

The PRA’s current intention being a multi-year programme, which they plan to outline soon, which will set out principles and incremental changes.

There are some clear benefits for banks adopting an early-stage strategic approach in anticipation of these changes:

• Foundation for Competitive Adaptation: Early investment in the foundations of granular reporting such as infrastructure, governance, and automation will allow banks to align with coming changes smoothly and positions banks to absorb incremental changes with minimal disruption.
• Operational Efficiency and Accuracy: Granular systems streamline data validation, aggregation, and reporting processes, providing high-quality information that reduces regulatory scrutiny and errors. Early adoption of solutions in this area will clearly have a beneficial impact for template level submissions even before the introduction of granular reports.
• Risk and Compliance Benefits: Improved data transparency aids better internal management of credit, market, and operational risks, supporting real-time oversight and robust early warning systems. Generating a repository of granular data creates new opportunities for business intelligence.

AI-powered analytics can make use of regulatory datasets for internal use, such as liquidity forecasting, scenario planning, and customer behaviour analysis: often revealing risk concentrations, profitability trends, and operational inefficiencies, giving management actionable intelligence.

• Regulatory Relationship: Banks who show readiness and engagement as reporting evolves are better placed to influence design and timing of future rules, and to gain reputational benefits with authorities.

Conclusion

Granular data reporting seems to be an inevitability in the future of regulatory compliance in UK banking, even if we don’t know exactly when this will occur, establishing new and more exacting standards for transparency and accuracy. When template-driven returns are phased out, banks will require scalable data platforms, governance structures, and AI-enablement. Those who embrace, and even anticipate, granular reporting early will unlock operational efficiencies, reduce compliance costs, and gain strategic insights from regulatory data.

AI-powered automation does not just simplify compliance—it transforms regulatory engagement, risk management, and business intelligence. In a world of ongoing regulatory change, the use of granular data will position UK based banking entities to remain resilient, competitive, and responsive to the evolving demands of supervisors, markets and clients alike.

Adopting this new approach represents a chance to build smarter, more strategic, and future-proof banks that turn compliance into opportunity.

Authored by

Andrew Kesbey

Andrew has been working in Banking and Software Solutions for the past 40 years in a variety of roles

Working in consultancy and pre-sales roles for solution providers in the areas of post-trade processing, SWIFT messaging, reconciliation, Andrew has focussed on the Regulatory Reporting domain for the past 11 years with Lombard Risk/VERMEG and Regnology. Andrew currently holds the position of Chief Growth Officer at Focusync.

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Focusync is a provider of Regulatory Reporting and Risk solutions to the UK Banking community. We offer a full scope (Bank of England, PRA, FCA etc), end to end platform on cloud or on premise with a focus on quality of both product and projects (for which we have a 100% record for delivering on time and at a fixed price with 24/7 support).

Our reporting solution supports a ‘No Touch’ workflow minimising operational risk, combined with innovations such as AI driven predictive liquidity to provide the most reliable, forward looking solution possible.

Our ALM and Stress Testing solutions share the same single source of truth data platform ensuring efficiency, accuracy and precision, establishing a solid basis for compliance while pioneering forward-thinking approaches to anticipate the evolving needs of the financial landscape – giving our clients the confidence to navigate regulatory challenges and embrace a future where efficiency meets foresight.