Featured Product

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    October 17, 2019

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally. The analysis is based on the responses to a survey on suptech strategies and use cases and is supplemented by information from the two previous FSI Insights papers on suptech and by information from the online tracker developed by Regtech for Regulators Accelerator. FSI and the Regtech for Regulators Accelerator conducted this survey jointly. The analysis reveals that, while suptech is still in its infancy, it is gaining traction, with a significant number of suptech use cases found in the areas of misconduct analysis, reporting, and data management. However, most of these use cases are still experimental in nature.

    Financial authorities have refined their use of technology over the years, leading to technologies that this paper would consider as suptech. The application of big data or artificial intelligence to tools used by authorities represents the latest generations of technologies that are considered to be suptech for the purposes of this paper. It is important for authorities to continue enhancing existing tools, including those not considered suptech. There are many ways of exploring suptech tools and these are not mutually exclusive. Most financial authorities covered in the paper either have suptech strategies in place or are in the process of developing them. A well-defined strategy can help authorities to optimally realize the potential benefits of suptech. However, for authorities that want to explore specific suptech tools first, before committing substantial resources, there are helpful avenues, such as innovation labs, accelerators, or tech sprints. These methodologies can also be included in authorities’ existing or future suptech strategies.

    The paper mentions that the latest big data or artificial intelligence-centered generations of technology that supervisors are either using or exploring have emerged only recently. Most suptech solutions are still in either the experimental or the development stages. Suptech tools are applied mainly in misconduct analysis, reporting, and data management. These tools will support financial authorities in better tackling non-financial risks. The experimental nature of most suptech initiatives may have prevented a greater number of external parties from participating in the development of suptech solutions. Most solutions are being developed within financial authorities, or at least partly using internal resources, with only about a quarter being developed solely by external parties. This may be due to the experimental nature of these initiatives, among other reasons.

    The paper notes that strategic partnerships with other authorities, academia, and research organizations will be important in overcoming the challenges associated with the experimental nature of these initiatives. The paper highlights that international coordination and collaboration could help to accelerate suptech development. Global standard-setting bodies and international organizations provide platforms for authorities to exchange information on their suptech initiatives. These international platforms could also be used to collaborate on the development of suptech solutions that may be useful to a number of authorities or to address the cross-border issues affecting suptech development. A good example is the recently announced BIS Innovation Hub, which is designed to foster international collaboration on innovative financial technology within the central banking community. Such platforms can help authorities to benefit from peer learning, including from different types of authority, helping to offset the lack of specialist providers. They also reduce the need for individual authorities to independently work on similar solutions, thus increasing efficiency. 

     

    Related Links

    Keywords: International, Banking, Suptech, Research, Regtech, Big Data, Reporting, FSI, BIS

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7311