Banks gain with govt-shared data dictionaries (SBR)

By Campbell Pryde, President and CEO of XBRL US; and John Turner, CEO of XBRL International

This blog is a follow-up to an earlier post on Standard Business Reporting in the Netherlands. The SBR white paper, Tangible benefits of data standards for business and regulators, has been updated to include details about SBR Nexus, a program developed by Dutch banks which is described below.

With XBRL-based data preparation and collection very much ingrained into the normal business activities of companies of all sizes in the Netherlands, Standard Business Reporting (SBR) has expanded into the private sector. The government-created shared data dictionary and approach is now leveraged in SBR Nexus, a program established by three major Dutch banks, ING, ABN Amro, and Rabobank.

In collaboration with the government and the corporate sector, the banks created a data exchange platform to standardize the transmission of data between property owners and banks in a secure, efficient, and seamless manner. It leverages the official SBR taxonomies used for financial reporting. The Dutch banks use SBR Nexus to collect digital reports on their customers' operations.

Banks were involved in SBR from the start of the program and are able to leverage some of the data points already defined by government agencies. They started with the taxonomy for annual reports that were defined by the government and extended this report with more granular data points. No data was sent from the Business Registrar to the banks but instead the “store once, report many” principle was used. This approach gives businesses the opportunity to make consistent software, where all data points are aligned, and ensure that one coherent report is sent to the banks.

SBR Nexus then added the collection of commercial real estate data for evaluation purposes, including appraisal reports, rental lists, and building-specific ESG data.  It has expanded into “Know Your Customer (KYC)” data from real estate clients. The Corporate Sustainability Reporting Directive (CSRD), a European Union (EU) program to collect ESG data from corporate entities, may provide some of the data needed by banks but is not sufficiently granular for bank needs. For example, banks are required to reduce CO2 emissions from loan clients and need to gather detailed information like CO2 emissions per type of truck in a situation where they are financing the purchase of trucks. Data collected at a more granular level must roll up accurately into the higher-level data collected through CSRD.

SBR Nexus is now incorporating banking confirmation into the program. A company can provide a banking confirmation signed by the client that allows their auditor to request the company bank statements and confirm that a client’s annual report is in line.

For smaller entities reporting in SBR Nexus, portals have been provided that allow data to be entered into the form and submitted. The form is generated directly from the taxonomy so that it’s updated quickly when there is a new taxonomy release.

The data is used both to help make credit decisions and to ensure that the banks have better, more up to date and finer-grained performance information about the companies in their lending portfolios. This, in turn, helps banks in the Netherlands to fine tune their own credit models, improving capital allocation, and overall risk management.