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AnaCredit – Why the Devil’s in the Detail

AnaCredit – Why the Devil’s in the Detail

AnaCredit, the European Central Bank’s project to collect granular credit and credit risk datasets harmonised across member states, was first initiated in 2011; and with the reporting deadlines looming in September 2018, credit institutions are hurrying to put the reporting mechanisms in place.

Figure 1 – The ECB and NCB’s provide data requirements to banks, who report back to the ECB via the NCB.

There are many benefits to AnaCredit – the harmonised collection and vision of credit within the euro area is one, allowing for meaningful comparisons of credit provision. The ECB will also get a better understanding of how organisations of all sizes are affected by monetary policy measures, be able to better evaluate macro-financial risks and ensure improved products are provided to customers through better loan-based risk management policies.

However, AnaCredit requirements have become difficult for many institutions to tackle, due to the devil lurking in the detail…

At a basic level we have the European Central Bank (ECB) requirements. When complied with, these are supposed to provide an element of harmonisation across the markets, but by allowing National Central Banks (NCBs) to make modifications to the standard, there is an instant possibility for complexity. It appears the temptation for scope creep is too much, and in fact some NCBs have started to include various little extra requirements.

By allowing National Central Banks (NCBs) to make modifications to the ECB standards, there is an instant possibility for added complexity.

At first, these additional requirements may seem minor, but it’s the hidden complexity they introduce that’s cause for concern. If a credit institution only needs respond to one NCB, then the problem is reduced. But, for larger organisations that must consider different NCBs, it can introduce cumbersome variations. Often, with these scenarios, local NCBs only seem to look through the lens of domestic institutions serving domestic clients. However, there will be many cases where counterparties will be located across the globe, whether direct customers or Immediate/Ultimate Parent companies.


Let’s look at some examples.

Industry Codes

The usually simple task of collecting an industry code for the Economic Sector should be straightforward, shouldn’t it? Well, the ECB requires this industry code to be a NACE2 code. However, the implementation of NACE2 can also be modified by each market.

For example, in the European NACE2 coding, there are 4 different codes for Sporting Activities:

  • 93.11 – Operation of sports facilities
  • 93.12 – Activities of sports clubs
  • 93.13 – Fitness facilities
  • 93.19 – Other sports activities

In the Netherlands implementation of NACE2 they decided to extend this coding to include:

  • 93.14 – Indoor Sports

So, when reporting this code on a Netherlands counterparty in a country where the NCB is applying strict validation rules (for example Ireland which only allows codes valid in the EU NACE2 system), the record fails validation and is rejected.

This is also evident in the UK where Companies House has introduced codes such as:

  • 74990 - Non-trading company

Again, this would fail validation against the EU standard.

These types of scenarios are forcing credit institutions to normalise their data, which is not a small undertaking. If you’ve ever worked on data remediation projects to cleanse and correct banks’ data, you’ll know it’s a huge project, where 100% accuracy is an unobtainable goal.

Domain codes and national IDs

In addition, just as institutions were getting ready and striving for adherence to the ECB’s required coding systems, a new set of domain codes for legal forms and national IDs were introduced in February 2018.This added 27 new national ID codes and over 300 new legal forms codes, while removing over 170 old legal form codes. Unfortunately, clarity around when these codes would be assumed in to NCB validation rules was lacking, though there has since been talk of aiming for a 3-month window, to allow implementation before shifting validation rules over to new coding systems.


Ireland‘s NCB has introduced even further differentiation, removing the 25k Euro threshold for loans (the level at which institutions have to report on counterparties) – which has added a further clean up burden by increasing the volumes of counterparties that now need to be reported.

Immediate and Ultimate Parent counterparties

Then, the real elephant in the room arrives - the requirement to also start reporting not just HQ, but also Immediate Parent and Ultimate Parent counterparties. This, in itself, intensifies the burden of data collection many times, but considering these entities may not be direct clients of the bank, it may also be difficult to obtain quality and timely information. Maybe these nuances don’t sound problematic at first, but once you move in to the detail they can easily cause delays to already tight deadlines.

In addition to the data availability and quality, institutions will (if they haven’t already) must make changes to their existing technology infrastructure and processes to meet the reporting requirements.

D&B Direct for AnaCredit:

Our D&B Direct for AnaCredit solution helps clients fulfil their counterparty reference data requirements, by providing all the required data attributes (identification, financials, size, legal proceedings, parents etc) in a timely manner, and in the required format and coding to the ECB and NCB standards.

We provide access to our broad and deep datasets, for over 300 million companies, to help you meet AnaCredit counterparty reference data requirements with ease. Our solution can be easily integrated with current solutions, and our Subject Matter Experts have an in-depth knowledge of the data requirements.

To find out more about D&B Direct for AnaCredit, please use the button below to schedule time with one of the team:

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