BaFin and Bundesbank Set Out Digital Agenda for Banking Supervision

Banking supervision essentially involves gathering, examining, and analyzing data and information, which is mostly done by financial supervisors. However, over the last few years, the amount of data has continued to grow and the pace at which data is generated has quickened as a result of the increasingly interconnected financial markets. In this context, the joint digital agenda includes the following:

• To obtain and process data more rapidly and more easily. The current banking supervisory reporting system is elaborate and highly complex for both banks and financial supervisors. The system is still significantly tied to the rigid structure of reporting forms. BaFin and Bundesbank want to establish more flexible digital channels in future. Instead of requesting information to be reported by a specific deadline as part of an inflexible procedure, supervisors should be able to obtain the information they need from the institutions directly if and where required. Ideally, supervisors would be able to gather more up-to-date and tailored information without overburdening the banks. It is also important to establish a modern and practical reporting system that adds value.
• To improve the quality of analysis. The objective is to allow financial supervisors to easily access, link, and analyze all of the available data and information regarding a bank. Ideally, this would not only involve the data that must be reported but also information from the media, analysts, and other sources. The goal is to rapidly evaluate large amounts of data and, for instance, use artificial intelligence to find ways to alert supervisors—with analytical tools that are based on advanced analytics methods, machine learning, and text mining, to name a few examples.
• To optimize internal processes of the supervisors and the process between BaFin and Bundesbank. The plan is to make all relevant information in the area of banking supervision available on a common desktop, similar to a dashboard. This will ensure that BaFin and Bundesbank can see the same data and information at any given time. On this basis, BaFin and Bundesbank can improve the way they jointly process cases, which supervised institutions will benefit from as well.

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Keywords: Europe, Germany, Banking, Banking Supervision, Data Collection, Reporting, Statistical Reporting, Basel, Bundesbank, BaFin