In May 2024, European Central Bank (ECB) released its final guide on effective risk data aggregation and risk reporting, accompanied by a feedback statement on the consultation that shaped the guide. This document aims to address persistent challenges in risk data management within financial institutions, emphasising the importance of accurate and comprehensive data for sound decision-making and regulatory compliance.


Why is managing risk-related data crucial for financial institutions?

Effective management and aggregation of risk-related data is vital for sound decision-making and robust risk governance. Accurate data supports both strategic and operational decision-making, and is essential for risk, financial, and supervisory reporting.

What are the benefits of accurate data?

Industry studies highlight the economic benefits of accurate data, such as advancements in digitalisation, improved risk management, and more effective strategic steering, leading to higher revenues and profitability. In the long term, accurate data can reduce operational and IT costs through better automation and robust IT architectures and systems.

What is the ECB's role in improving risk data practices?

ECB Banking Supervision has prioritised governance and quality of risk data since its inception. In 2016, the ECB conducted a thematic review of effective risk data aggregation and risk reporting (RDARR) based on the BCBS 239 principles. The review revealed significant shortcomings across institutions, none of which fully adhering to the principles.

What steps has the ECB taken to address these issues?

In response to these findings, the ECB has intensified its supervisory approach, urging institutions to make substantial improvements. Despite increased scrutiny, progress has been insufficient, and many structural deficiencies remain unaddressed. After allowing institutions time to adhere to the principles, the ECB started conducting various On-Site Inspections (OSIs) across regulated institutions.

What is the purpose of this Guide?

The guide outlines ECB's expectations for RDARR, aiming to strengthen institutions' capabilities and address identified shortcomings. It applies national, EU laws, BCBS 239 principles, offering recommendations for enhanced data governance and risk reporting practices.