One Year Into The Largest XBRL Implementation to Date
The FDIC, partnering with the Federal Financial Institutions Examination Council (FFIEC) Call Report banking agencies including the Federal Reserve Board (FRB) and the Office of the Comptroller of the Currency (OCC), began an innovative effort, called the Call Report Modernization Project, in 2003 with the goal of providing FFIEC Call Report agencies with more timely access to the quarterly Call Report data they use to assess the financial health of more than 8,000 financial institutions. The Central Data Repository (CDR) project into which data from each financial institution is input using eXtensible Business Reporting Language (XBRL), was completed in October 2005 and is the largest XBRL implementation of its time.
The use of XBRL provides a uniform filing methodology and transforms the data collection process in a way that delivers industry-wide efficiencies and a higher quality of data. FDIC Vice Chairman Martin J. Gruenberg acknowledged the important management benefits that the FDIC has derived from XBRL in a speech at the 14th International XBRL Conference in December 2006, detailing how “the FDIC has utilized the XBRL standard to improve dramatically the speed and accuracy of reporting of data by federally-insured financial institutions”.
As early as 2003, Ernst & Young and Morgan Stanley suggested that early adopters of XBRL would “realize economic benefits by participating in the creation of this new software-readable standard” and gain competitive advantages. The companies jointly developed some use cases demonstrating some of the anticipated uses and benefits of XBRL to the banking industry.
Although XBRL has not been implemented in all areas of the banking industry, many of the expected benefits are already being realized. According to Gruenberg, the CDR has yielded the following benefits:
- Ninety-five percent of banks' original filings are clean, compared to only 66 percent under the old system;
- One hundred percent of data received are meeting mathematical requirements compared to 70 percent under the old system;
- Data receipt begins less than one day after the calendar quarter-end, compared to weeks of delay under the old system;
- Publication of the Quarterly Banking Profile, our flagship Call Report summary publication, occurs as much as three weeks earlier than before;
- Agency analyst productivity has improved 10 to 33 percent;
- We gain access to data sooner — improving publishing speed and the ability to analyze data for supervisory purposes; and
- Regulator and bank use of consistent XBRL taxonomies allows real-time correction capability.
“[T]he FDIC’s implementation of XBRL has improved the safety and soundness of the U.S. banking system and its transparency to the public,” Gruenberg concluded. “We believe that the XBRL standard has widespread applications across both the public and private sectors with dramatic potential benefits to many forms of financial reporting.”