XBRL usage from Banks and Fintechs


XBRL adaptation for reporting, monitoring and supervisory purposes is a broad topic that encompasses Central Banks, Regulators, Stock exchanges, individual companies (both private and public).

Main relationships that can benefit from XBRL adaptation in the financial sector

Central Banks can improve their favorable financing business to the banks, if they adapt XBRL.

Imagine that all banks report in XBRL and therefore the Central Bank has near-real time data available to assist them in evaluating the credit lines (e.g. the discount window) to each bank and the collateral held. We have found no evidence yet, of such XBRL use case.

The European banking crisis brought that to light, as the ECB and the IMF had to await for months the reports from Blackrock and Pimpco that sent their people to look through the books of the Central banks in Greece, Cyprus.

One of the earlier adaptors of XBRL are the Reserve Bank of India (IRIs XBRL solution) who is considered a pioneer in using technology; and the Securities and Exchange board of India. Recently, the Dutch Central bank stepped up in collaboration with AxiomSL to first its own internal regulatory reports in XBRL format, for submission to the European Banking Authority (EBA) but also for monitoring the local derivatives market. The latter will enforce that Dutch banks report all their OTC derivatives activities in XBRL format.

Europe has 28 Central banks and they are starting to adopt XBRL in different areas. We are however, far from claiming that we can see the light at the end of the tunnel in terms of standardization and inter-operability of all this data.

Financial regulators receiving near real-time XBRL data from banks could improve the financial soundness of their local financial ecosystem and the international accessibility to such data.

Over 30 regulators have agreed to the principle of adaptation. The SEC is the leader in this movement and has enforced this requirement for all public companies (has excluded investment companies)! Edgar is the SEC filer and viewer of such data. The FCA in the UK is using GABRIEL by Arkksolutions.

The XBRL accounting data reported to regulators could at the same time go to Stock Exchanges and to the corresponding Corporate websites. We are not seeing this yet. The retooling of internal bank systems to make XBRL filings really the norm and to guarantee high quality of data, has not happened.

The most recent Fintech evidence of this gap can be understood from the late Spring, Lending Club accident. We covered the issues that same week on DailyFintech. As a publicly traded company, LC does report to the SEC on a quarterly and annual basis but as investment company is not obliged. As they state on their website

How is Lending Club regulated?

The regulatory framework for Lending Club’s marketplace has been in place since 2008. On the investor side, we’ve registered the offering of the public investments (called Notes) with the Securities and Exchange Commission and we file annual, quarterly, and other reports with the SEC. You can review our prospectus and our SEC reports are available to read here.

On the borrower side we’ve partnered with WebBank, an FDIC-insured bank, to issue the loans. Accordingly, all loans we facilitate are subject to the same consumer protection, fair lending, and disclosure regulations as any other bank loans.

As part of the research for DailyFintech, I accessed their SEC reports in the Investment adviser section (which is excluded by the XBRL mandatory reporting) that of course were delayed by a quarter; and certain parts entailed a cost to access. Most importantly, I couldn’t dig into the Webbank reports (FDIC insured bank obliged to report in XBRL) and segregate the Lending Club notes business. Last but not least, waiting for the next quarterly reporting, which was delayed due to management problems, was more evidence of archaic processes. XBRL should open up these opaque and costly processes.

This specific application of using XBRL data and metadata, to deliver actionable investment insights to investors; is what some Fintechs are after. We covered some of these in last year’s landscape report: Capital Cube (stocks, ETF, portfolios), MarketRealist (stocks, sectors, funds and ETFs), and StocksfortheWeek (focused on undervalued stocks).

We add to these, MarketWall, an app from Analytixinsight, a Canadian publicly traded company who is also the parent of CapitalCube, that uses XBRL to offer the first financial App built for smart devices: Samsung TV, smart watches, tablets and smartphones. It has more than 10mil users (as of Dec 2015) and recently struck a partnership with Banco Intesa Sanpaolo, that will integrate MarketWall app on their digital platform and offer execution too.

Central banks and Regulators haven’t managed yet to get the banks to fully adapt the XBRL reporting standards, nor the Fintechs eating the lunch of incumbent financial institutions are practively adopting the XBRL reporting standars; to an extent that the process is really transparent and the full benefits are realized.

We will keep monitoring the process and reporting.

For the XBRL Week Intro and Index please click here.


Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network.  Efi Pylarinou is a Digital Wealth Management thought leader.

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