General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 16, 2018

FSI published a report that examines the experience of early users with the use of innovative technology by supervisory agencies (suptech) to support supervision. The report first describes the uses of suptech. It then examines user experiences with suptech covering how and why do supervisory agencies develop suptech applications, the challenges that supervisory agencies face in developing suptech applications, and the implications of suptech for supervised entities. Finally, the paper presents useful insights that could help supervisory agencies take advantage of suptech developments.

The report highlights that suptech is currently found in two areas of applications: data collection and data analytics. Supervisory agencies initiate and organize their suptech activities in several ways. The challenges faced by agencies in developing or using suptech applications include computational capacity constraints; increased operational risks, including cyber risk; data quality; finding the right talent, management support, and buy-in from supervision units; rigid rules in project management; and lack of transparency in some of the data analytics applications. The benefits of suptech applications can extend to supervised institutions. They can lead to reduced compliance costs and contribute to enhanced risk management effectiveness. This is particularly the case for automated reporting. 

Supervisory agencies would be best placed to explore the potential benefits of suptech applications if they have a well-defined suptech strategy. A suptech strategy should comprise the following three key elements, at a minimum:

  • Ambitious, but achievable, targets (for example, which technology will be used, in which area of supervision, and how will it be funded)
  • An assessment of data availability, data quality, and availability of analytical resources
  • A step-by-step action plan on how the supervisory agency will get from the current situation to full implementation of its suptech strategy

The experience of early suptech users, as discussed here, yields some useful insights on how to develop such a strategy. The overall approach to supervision should adapt to the digitization of the activities of supervised entities. As finance becomes increasingly digitised, financial supervision needs to keep up.

 

Related Link: FSI Paper (PDF)

Keywords: International, Banking, Suptech, Regtech, Suptech Strategy, FSI

Related Articles
News

EBA Publishes Reports Monitoring the Implementation of Basel III in EU

EBA published two reports measuring the impact of implementing the final Basel III reforms and monitoring the implementation of liquidity measures in EU.

March 20, 2019 WebPage Regulatory News
News

BCBS Publishes Results of Survey on Proportionality in Bank Regulation

BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.

March 19, 2019 WebPage Regulatory News
News

US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy Swaps

US Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.

March 19, 2019 WebPage Regulatory News
News

EIOPA Requests Data on LTG Measures from Insurers Under Solvency II

EIOPA has requested the European Economic Area insurance undertakings, which are subject to Solvency II, to provide information on the long-term guarantee (LTG) measures.

March 18, 2019 WebPage Regulatory News
News

PRA Proposes Reporting Amendments to Pillar 2 Liquidity Framework

PRA proposed (CP6/19) regulatory reporting amendments and clarifications to the Pillar 2 liquidity framework for banks in UK.

March 18, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for March 2019

EBA published answers to seven questions under the Single Rulebook question and answer (Q&A) updates for this week.

March 15, 2019 WebPage Regulatory News
News

OCC Updates Recovery Planning Booklet of the Comptroller's Handbook

OCC updated the Recovery Planning booklet of the Comptroller’s Handbook.

March 15, 2019 WebPage Regulatory News
News

CFTC and MAS Announce Mutual Recognition of Derivatives Trading Venues

CFTC and MAS announced the mutual recognition of certain derivatives trading venues in the U.S. and Singapore.

March 15, 2019 WebPage Regulatory News
News

EBA Publishes Report on Convergence of Supervisory Practices Across EU

EBA published annual report on the convergence of supervisory practices in EU.

March 14, 2019 WebPage Regulatory News
News

CPMI-IOSCO Publish Update to Level 1 Assessment of PFMI Implementation

CPMI and IOSCO jointly updated the Level 1 Assessment Online Tracker on monitoring of the implementation of the Principles for financial market infrastructures (PFMI).

March 14, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2763