The Australian Prudential Regulatory Authority (APRA) is leading the pace by being the first major regulatory body in the world to adopt Extensible Business Reporting Language (XBRL). The authority will deploy XBRL to help it collect data from around thousands of super funds, insurers and banks more accurately and efficiently.
APRA was formed in 1998 to replace 11 state and federal agencies, including bank supervision previously handled by the Reserve Bank of Australia. APRA is now responsible for the prudential regulation of more than 12,000 banks,insurers, pension funds and other deposit-taking institutions.
On its formation, APRA inherited six different legacy data collection systems. To add to the confusion, APRA also stands in the midst of a complex information supply chain. Financial institutions reporting to APRA create documents that need to be used for things such as internal and external company needs, regulatory filings, online filings and publishing. APRA also shares this information with a number of other government agencies such as the Australian Bureau of Statistics and the Reserve Bank of Australia, requiring an additional keying and transfer of information.
As a result, business reports of all types are created, reworked and re-transmitted to multiple people and institutions in many different formats over and over again by re-keying data. Each step widens the scope for error and costs significant amounts of money in lost working hours.
APRA set about to reduce the cost, time and effort required by its organisation and members to collect, collate, format and analyse data sent to its agency, and after toying with the idea of a proprietary solution, decided to settle on XBRL as a universal formatting standard for financial statements.
XBRL, which is based on the next generation of XML, uses a series of labelling systems to tag or code financial data.
These tags lets any information be processed for a variety of uses, whether it be Web publishing or to send compliance documents to regulators. In addition, the information can be received by a variety of technology formats from spreadsheets to online search engines.
APRA has already discovered a number of the benefits of XBRL. Its disparate systems have been able to attain greater interoperability as all systems can read and understand the data. In addition, it has been able to conduct a quicker analysis of financial data as it doesn't need to be re-keyed. This has also increased the accuracy and timeliness of the information.
John Turner, senior project manager, policy, research and consulting at APRA, said the real challenge now is for ITmanagers to understand the efficiencies of bringing XBRL into their business.
"The big win is when financial service companies provide XBRL out of their systems -- they get end-to-end integrity,we get more confidence in the quality and timeliness of information and it cuts out huge amounts of manual processing for all players involved in the financial information supply chain," he said.
"XBRL is like having a new export format for your computer system ? it's just that it's the most useful export formatthat you could ever dream of," he added.