Track 4 Title: How XBRL Facilitates the Electronic

Collection of Financial Information for Credit Risk Rating,

Name: Igno J. Dekker, Business Architect, ABN AMRO Bank, The Netherlands.

Date: Thursday, June 25. 11.00 – 12.30

Flash back

Observations

Developments in banking sector

(Dis)Advantages Banking Taxonomy

Agreement Government and banks

Goal SBR NL: reducing administrative burden - by semantic and technical standardization - and ensure the connection between the taxonomy and the law

In 2007 the Dutch taxonomy was available: mission completed! - number of data elements dropped from more than 200.000 12.000 - in practice the taxonomy was used by professionals for interpreting law and regulations, and accounting practices - advantages of the Dutch taxonomy were and are beyond doubt - there was and is a growing interest in the concept - banks did not participate until October 2007

… but…

“What in it for me?“

Organisational problems

Is there a political and corporate need?

Ultimately, it comes down to moderating the chain

Fulfil Basel II requirements

1. Program lending vs. Non-program lending 2. Automated creditscoring based on bankspecific models

Increase data quality: standardization and prevent data entry mistakes by electronically exchange of annual account information

Investigate the possibility of an online, realtime end-to-end credit process for program lending products

The need to get more credit specific information from the annual account data

15Est Credits (Introductie) d.d. 24/10/05

Service concept versus delivery concept(future)

Product

Commer-cialConsu-mer

Non-Program Lending

Program Lending

Service concept Delivery concept

CLIENT

CCU

SME

Preferred

Retail

In close cooperation between two banks, two financial intermediaries and the SBR operational office, the data elements for the credit process of Program Lending products are specified and defined

Starting point was: the Dutch Taxonomy on tax basis, built in 2007

Bank extension means that the data required for the credit process are standardized for the credit lines until € 1 mln.

Tax processes

Tax domaih

Tax Accounting

Process defin. Bankingand shared processesservices

Baseline tax Generic Baseline Baseline banking

Interconnected regulatory reporting

Acc

ount

ing

syst

em a

nd re

late

d in

tern

al c

ontr

ols

Data and report definitions

Process definitions

Quality control

Banking domain

The Dutch Tax Administration is interested in the total amount of fixed assets. The banks are interested in the tax and market value of the individual objects

The tax administration needs the total amounts of debtors and creditors. The banks are interested in the next specification:

Specify number/ amount Debtors & Creditors

0 – 30 days30 – 60 days60 – 90 days > 90 days

Data exchange to different parties (Tax Administration, Chamber of Commerce, Statistics Office) from one administration point

Taxonomy connected to accounting software. Data can be generated automatically.

Apply for credit can be answered online, real-time in the near future

Apply for credit via internet channel

Disadvantage Bank extension needs additional data on top of tax administration

No difference between commercial and fiscal annual account

Paper output will be replaced by electronical output

Validation of in between information means additional work

More attention for benchmarking

Disadvantage Decreasing efforts of accountant by standardization

One valuation standard

One point of data generation

No manual data entry

Higher frequency of data exchange. Improvement credit control

Increasing quality of data and credit risk models

Disadvantage It becomes much easier to apply for more than one quotation

Major problem:

Dutch Taxonomy and bank extension are defined, but how can both parties mobilize/”bootstrap” the market

Solution:

Joint efforts of Government and banks to stimulate the use of the Dutch taxonomy included the bank extension. Agreement signed on June.9th 2009