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Regulator proposes guidelines to enhance data governance at Chinese banks

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Regulator proposes guidelines to enhance data governance at Chinese banks

China's banking regulator issued draft rules covering data governance at banks to strengthen risk management.

The China Banking Regulatory Commission, or CBRC, said March 16 that banks in the country have accumulated massive volumes of data in the course of business expansion that can be leveraged to improve operations. Currently, however, the regulator pointed out existing data quality issues that need to be addressed, primarily those related to accuracy, comprehensiveness and timeliness of data. These hinder the further development of banks as well as the regulator's supervisory abilities.

In the draft guidelines open for comment until April 16, the CBRC clarified the framework for data management at banks, including dividing up oversight responsibilities among senior management, the board of directors and the supervisory board. The rules also propose that banks establish a data management department and appoint a chief data officer.

Further, the regulator proposed that banks establish a data quality control mechanism and improve data quality to boost the authenticity, accuracy, comprehensiveness and timeliness of the data. The CBRC also noted that each bank's board of directors is ultimately responsible for issues relating to data at the company.

Banks should also integrate data applications into everyday operations to effectively stem risks when they arise and improve internal controls, according to the guidelines.

The CBRC also noted that it will take action on lenders that do not meet the proposed guidelines, including requiring banks to come up with rectification measures.