Updated: Apr 10

On 26th of March 2021, APRA released for the first time the technical taxonomy artefacts for APRA Connect.

APRA has released the draft technical taxonomy for the first phase of the Super Data Transformation (SDT) program. SDT related forms will be some of the first ones to be submitted through APRA Connect in September 2021. APRA is running a pilot program with a small number of nominated superannuation entities to test out the APRA Connect portal, ahead of releasing the external test environment to the wider industry in June 2021.

The draft artefacts include the data dictionary, validations, reporting taxonomy and XSD files.

APRA's newly released taxonomy introduces an entirely new submission and validation structure for APRA Connect. D2A and APRA Connect will co-exist for the foreseeable future, as APRA has indicated that only new reporting requirements will be introduced into APRA Connect.

RegConnect provides validation and straight through submissions in both APRA Connect and D2A, making the transition to APRA Connect a smooth journey for any regulated entity.

Would you like to learn more about how we can help you be APRA Connect ready?

Contact us today for a demo or a quote, or join one of our regular demonstrations via webinar.

Starting September 2021, the Australian Prudential Regulatory Authority (APRA) will begin progressive transition of its data collection to their new platform APRA Connect. APRA Connect is a strategic investment by APRA aimed at providing further flexibility and efficiency to both the regulator as well as the regulated industry. APRA Connect will also be a key enabler for the regulator to collect increased granular data from the industry in the future.

APRA Connect will replace the current desktop-based platform Direct to APRA (D2A). D2A has been around for multiple decades now and is deeply embedded in the overall regulatory reporting process playing a crucial role in data quality monitoring, enforcement, and reporting submissions. This is a major change to all industries regulated by APRA that use D2A for reporting submissions. D2A will be phased out over an extended period of time; and entities must prepare their systems and processes to submit their data to APRA on both APRA Connect and D2A. Most recently, APRA introduced further changes to D2A (version 6); highlighting the significant dependency the regulator will continue to have on D2A in their regulatory processes.

APRA Connect is a web-based platform that is being implemented by an international vendor. The project has been running since 2018 with a disruption due to the pandemic that led to the project being put on hold for 6 months. APRA has now confirmed the go live date as September 2021. A test environment is also planned to be made available in June 2021.

In this article we look at some of the considerations for entities in addressing this major change from APRA.

Manual vs. Automated submission

Many entities submit data manually on D2A today by copy-pasting data into the platform. APRA Connect will make manual entry significantly more cumbersome, as it supports entry of only one data point at a time. For entities submitting data manually currently, early assessment of this impact is highly recommended to determine the feasibility of continuing manual submissions on APRA Connect.

Automation of regulatory reporting submissions will lead to greater efficiency and will minimise risks for entities submitting data manually. However, the degree of automation is something entities must consider while considering timely readiness for APRA Connect.

Below is an example of a typical regulatory reporting process flow highlighting the automation areas.

There are several vendors offering solutions that aim to automate the entire flow. Entities can derive significant benefits from automation, including increased data quality, operational efficiencies and improved governance and controls.

However, implementing end-to-end automation can also be time-consuming and sometimes cost-prohibitive and may not be fit-for-purpose for every organisation (depending on size and complexity).

Every organisation requires an external solution for their submissions in APRA Connect and D2A.

It is important for entities to carefully consider all the automation solution options available and the degree of automation considering the timeline for APRA Connect go-live and specific needs of their organisation. Not every organisation will automate the end-to-end process; but every organisation requires an external solution for their submissions in APRA Connect and D2A.

Co-existence of D2A

APRA Connect will be progressively rolled out across all industries. Whilst all entities must maintain their entity information on APRA Connect from DAY 1, it is still unclear when APRA intends to transition its existing forms over to APRA Connect . Although APRA has made clear of its intent to retire D2A at some point in the future, D2A likely to co-exist along side APRA Connect for many more years to come.

Entities must consider this situation in their overall impact assessment and solution identification exercise. Some areas of consideration in this regard are:

  • Process and tools adjustment to easily identify all APRA reporting obligations across both platforms for every reporting period

  • Process re-engineering to reduce duplication of effort due to multiple submission platforms e.g. pre-validation of data, review and approval, reconciliations

  • Reconciliation of submissions across both platforms

  • Infrastructure setup for seamless submission on both D2A (desktop-based platform) and APRA Connect (web-based platform) for a given user

Nature of reporting on APRA Connect

APRA Connect will initially be used for collection of data for the newly introduced reporting standards such as Private Health Insurance (PHI) reform (HRS 605.0), Superannuation data transformation collections, and ARS-220 Credit Quality. The common pattern across these new reforms is APRA’s intent to collect more granular data. Collection of granular data is largely a positive move from the regulator that will eventually ease the burden on regulated entities but also provide the regulator with greater flexibility to interrogate industry data for policy supervision.

Below is an example of APRA shifting away from form based data collections to granular data set based data collections. Proposed ARS-220 Credit Quality applies to Banking industry and the new reporting standards are set to be implemented via APRA Connect.

Granular data collection from the industry is another significant change APRA is introducing in parallel to rolling out a new data collection platform. Changes such as Superannuation data transformation or ARS-220 credit quality in themselves are significant and will require a lot of effort from entities to prepare and address this regulatory requirement.

Entities must consider the nature of data being reported on APRA Connect on go-live in their overall assessment of this change. Moving away from form-based collections will result in changes on how data is prepared, validated and reconciled with other submissions and the ledger/source of truth. Entities must also consider the technology requirements for such a change. Submission of vast amount of granular data will introduce its own complexities such as system performance, scalability etc.

RegConnect will get you APRA Connect ready while realising automation benefits for D2A submissions today.

In conclusion, APRA Connect implementation must not be taken lightly by entities big or small. This is not just a technology replacement program by APRA. This will introduce a fundamental shift in how entities prepare and submit their returns to APRA. We highly recommend entities take a holistic and strategic approach while defining their future state of regulatory reporting by considering both the entire series of changes planned by APRA, but also tapping into the latest advances in technologies to create a more flexible, agile, and scalable solution.

This is no easy exercise and will take time to do it right. RegConnect can prepare your organisation for this upcoming change from APRA in a timely manner with minimal impact to your existing process. Built on latest technologies and standards such as micro-services architecture, RegConnect has been carefully designed to be flexible and agile to address any regulatory change that will be introduced by the regulator in the future (e.g. more granular data collection, APIs for submission etc.).

Contact us to know more about RegConnect or to book a demo. You can also register to one of our regular live demo webinars. If you can't make it on the day, we send the recording of our regular webinars to all registrants.

Often termed “bar codes for reporting”, eXtensible Business Reporting Language (XBRL) is an international business reporting standard adopted by many regulators, companies, and other agencies across the world for standardising and simplifying collection, and exchange of information between organisations. XBRL is an open standard and is in use in more than 50 countries.

XBRL simplifies and standardises reporting across multiple stakeholders e.g. businesses to government agencies, business to business etc.

Adoption of XBRL is rapidly replacing the use of paper based, PDF or complex report-based data submissions and exchanges in many industries with a standardised digital submission model that is independent of any software application or platform, making it useful for the transmission of business and financial information to multiple company stakeholders and regulators.

Some of the key features of XBRL:

Clear definitions: XBRL allows the creation of reporting taxonomies that are defined in a standardised manner and is reusable. Reporting taxonomies are developed by regulators for example in allowing regulated entities to understand the information that needs to be reported.

Testable Business Rules: XBRL allows incorporation of business rules that can be logical, mathematical or both. These rules can be applied at the point of submission of data or at the point of receiving making it usable for both data supplier (e.g. entities submitting a regulatory report) as well as the receiver (e.g. regulator receiving the report).

XBRL can also support automatic aggregation of data or creation of ratios or other value adding analytical outputs on the raw data being supplied.

What is a taxonomy?

A taxonomy is a language system used to clearly and accurately classify and define certain type of information. Taxonomies have been developed in business and finance to ensure consistency in how governments, regulators, businesses and other stakeholders use, and understand the meaning of, key words and phrases through the reporting value chain.

XBRL in Australian Regulatory Reporting Landscape

In Australia, the most important taxonomy used for regulatory reporting is the SBR AU Taxonomy, which is part of the Standard Business Reporting (SBR) initiative. The SBR initiative led by the Australian Government since 2010 is leveraging XBRL to create a standardised reporting definitions (SBR AU Taxonomy) & to enable data collection or exchange in this format leveraging the SBR AU Taxonomy.

The SBR AU Taxonomy is a collection of data elements that may be required to be reported by business to government agencies. These data elements are classified and defined in the SBR AU Taxonomy – like a dictionary. The agreed data elements and their associated definitions are used in the creation of machine-readable reports (in XBRL format) to be submitted by a business to agencies using SBR. The data elements are defined once and reused across multiple forms and multiple agencies. By reusing common data elements, businesses only need to understand and report to government on these data elements irrespective of the agencies requiring this information. Each SBR agency identifies and defines the data elements required for their reporting forms in scope. APRA being one of them. APRA incorporated SBR from 1 July 2011.

For APRA reporting, there are 2 types of taxonomies that are SBR-enabled.

  • Definitional Taxonomy refers to the dictionary of all terms and their agreed meanings.

  • Reporting Taxonomy refers to the combination of terms, concepts and dimensions needed to report specific information to APRA. The combination of terms, concepts and dimensions provide enough granularity in a structured manner for collection of specific financial or numerical data point (fact).

The SBR AU taxonomy is written using XBRL. Entities can use XBRL as an alternative method for submitting data to APRA in the form of an XBRL instance document.

APRA’s current data collection platform Direct to APRA (D2A) as well as future platform APRA Connect are SBR enabled meaning entities can submit their data using XBRL format on both these platforms.

The benefits for entities in using XBRL

Using XBRL for all regulatory reporting submissions essentially means being SBR Compliant for entities. Being SBR enabled can lead to:

  • tighter, more streamlined and cleaner regulatory and operations control frameworks

  • a reduction in manual interventions

  • "single" definition of reporting dimensions and concepts; de-duplication of reporting logic

  • consistency in definitions of reporting concepts and dimensions which are common across data collections

  • improved reconciliation and movement analysis

  • greater traceability, auditability & transparency

  • streamlined reporting processes, less data manipulation, less time needed to produce reports and

  • fewer re-submissions to the regulator. This is in addition to creating greater confidence in the regulatory reporting process.

Transition to XBRL should not be considered merely as an efficiency driver for regulatory reporting. XBRL enables greater quality of data for the organisation over time and when implemented effectively, can radically simplify overall regulatory reporting across multiple agencies and create alignment of reporting both internally and externally.

RegConnect supports submission of data in XBRL format.

How we can help you leverage this standard

If you would like to know more about XBRL or SBR and how you can transform your reporting using this standard, feel free to get in touch with one of our data and regulatory reporting experts for an obligation free conversation.

If you would like to use XBRL for APRA Reporting, contact us to know more about our frictionless APRA submission platform RegConnect or to book in a free demo tailored to your existing process. Check out our website to learn more about RegConnect or if you would like to register for one of our regular demo webinars.