Technology in the Financial Services industry has quickly advanced to unprecedented levels of growth, rendering a myriad of software relying mostly on manual entry inefficient if not obsolete. The mounting pressure of constant regulatory change and demands for more detailed information from regulators in the financial space has forced regulated entities to shift to automated and more productive reporting processes.
APRA collects data from Australian regulated entities (banks, insurance and superannuation companies) through D2A, a java-based data collection application it has built in-house. The client-tool enables regulated entities to fulfil their reporting obligations and offers some useful features such as downloading forms, filling forms via XBRL import, performing validation checks & test submissions, and retrieving previously submitted data. However the tool has become a bottleneck in the reporting process due to the tedious manual work required to take advantage of these capabilities and the lack of automation features.
APRA has received feedback from all the stakeholders in the data collection process and fortunately has commenced a program of data transformation. It emphasised that a replacement for the D2A tool will be necessary to address the industry’s current challenges.
(source - www.apra.gov.au)
The rise in cloud computing has made distribution of software easier and hassle free because, unlike standalone applications, they are readily accessible via the web browser without requiring any additional installation, patching or configuration. APRA has confirmed in recent round-table discussions that the next version of D2A will be web-based with automation features at your disposal. In addition, the new system will be using Standard Business Reporting (SBR) reporting taxonomies, which exist since 2011. APRA, however, has made it clear that development will be externally managed.
We envision a web-based portal to the new D2A system (e.g. d2a.apra.gov.au) with an improved user interface with advanced capabilities; which will leave entities with the choice of manual report submission, or full automation. In order for automation to be possible, the D2A web-based system must have API (Application Programming Interface) capability. Technologies that can be used for creating web APIs for invoking remote services include REST (Representational State Transfer), ROA (Resource-Oriented Architecture), RMI over IIOP, XML over HTTP (XML-RPC), CORBA, SOA, and SOAP. The recent trend so-called Web 2.0 has moved away from SOA and SOAP towards more direct REST style web resources and ROA. Most open banking platforms use REST technology for their API implementation and have a subdomain named “developer” which provides all of the API documentation. We anticipate that new APRA data collection solution will have one too (e.g. developer.d2a.apra.gov.au), so that the technology industry can take full advantage of the new platform to deliver adjacent solutions to the regulated entities.
A developer will be able to write a simple program to call the API in any programming language of their choice. The developer can also opt to directly use either “curl” or “wget” command from the command line on UNIX or Linux operating system to send an HTTP request. Both commands allow you to send GET and POST request, which means you can also call REST web services. Using the aforementioned built-in commands is a better alternative for script automation which does not require any additional program installation and compilation.
APRA will go through a public tender process during Q2/Q3 of 2018 with the aim of announcing the chosen provider before Year-End. Incumbent software providers (Vizor, Bearingpoint, Power SQL and alike) will most likely be compared against Australian based technology providers; and potentially the local RegTech industry. We will watch this space closely over the next couple of months.
If you have any questions about how the D2A replacement project will impact you, please contact us.