Pillar 3 and the Future of Digital Regulatory Reporting
The regulatory reporting landscape is undergoing a quiet revolution, and nowhere is this more evident than in the evolution of Pillar 3 disclosures. At the recent Digital Reporting Conference in Frankfurt, one message came through clearly: the shift toward structured, machine-readable regulatory data is gaining pace, with Pillar 3 reporting at the forefront.
From PDFs to XBRL: A New Era for Pillar 3
Under the EBA 4.1 reporting framework, Pillar 3 disclosures, which were traditionally published as static PDFs, must now be submitted in structured XBRL format. This is not just a technical upgrade but a fundamental shift in the way transparency is delivered across financial services.
Pillar 3 plays a key role in the Basel III framework. While Pillar 1 defines capital requirements and Pillar 2 focuses on supervisory review, Pillar 3 is designed to communicate risk management disclosures to the market. Now, that communication must be clear, accessible, and ready for automated analysis.
This transformation forms part of a wider initiative to establish a centralised European data hub, where Pillar 3 reports will be made publicly accessible. The aim is to ensure financial data is:
- More transparent
- More standardised
- Easier to analyse
The transition also positions Pillar 3 as a model for broader EU regulatory reporting reforms.
The Impact of XBRL-CSV on Pillar 3 Disclosures
This marks the first mandatory use of the XBRL-CSV format, which is a more compact and efficient alternative to traditional XBRL-XML. While all CRD reports will adopt this in 2026, Pillar 3 XBRL reporting is already live from 2025.
Key updates include:
- Only basic technical validation checks by the EBA
- Direct submissions to the EBA, rather than through NCAs
- The same direct submission model is being adopted for MiCAR crypto asset reporting, and similar frameworks are likely to follow
Insights from the Field: DORA, DPM 2.0, and Taxonomy Updates
In parallel with the move toward digitisation, several complementary frameworks are evolving. Each one presents its own set of regulatory implementation challenges.
DORA Register of Information (ROI): Early Lessons
The first cycle of the Register of Information under DORA (Digital Operational Resilience Act) has introduced several challenges:- Delays in guidance created uncertainty for firms preparing submissions
- Confusion over file format terminology, particularly plain CSV versus XBRL-CSV
This experience highlights the importance of clarity, collaboration, and the role of experienced regulatory reporting software partners who can help interpret fast-changing requirements.
DPM 2.0: A New Design Language
The shift to Data Point Model (DPM) 2.0 represents the most significant redesign in over a decade. Enhancements include:- A modernised structure with improved template logic
- More dynamic handling of dimensions and metadata
- Increased flexibility for regulators in data collection and analysis
As with any major transition, firms have encountered some ambiguity and have needed to respond with agility and foresight.
Taxonomy 4.0: Navigating Change
The release of EBA Taxonomy 4.0 has demonstrated the importance of active participation in the regulatory conversation:- Multiple errata releases and deactivated validation rules
- DPM modelling issues and challenges with cross-validation during the migration to DPM 2.0
These challenges make it clear that staying compliant is not just about reviewing documentation. It also requires insight, timing, and trusted guidance. At ARKK, our close working relationship with regulators enables us to identify inconsistencies early and support our clients through these transitions.
Important Update: xBRL-CSV Delay
The initial release of Taxonomy 4.1 in May 2025 was followed by a hotfix to resolve several technical issues identified shortly after publication.
The European Banking Authority (EBA) also announced a delay to the mandatory use of xBRL-CSV for CRD reports. Originally set for December 2025, the start date is now aligned to the March 2026 reference period. This gives firms additional time to enhance internal systems and processes to support the new format.
Preparing for the Future of Regulatory Reporting
The shift toward structured, digital financial regulatory reporting is now well underway. Pillar 3 is setting the pace for future frameworks, and financial institutions will need to adapt quickly to new expectations, technologies, and data standards.
At ARKK, we help our clients stay ahead of these changes. Our solutions are designed to simplify complexity, reduce risk, and ensure ongoing compliance with evolving EBA regulatory requirements.
