BaFin and Bundesbank Set Out Digital Agenda for Banking Supervision
BaFin published an article explaining that BaFin and Bundesbank have defined their strategic objectives as part of a joint digital agenda—representing a comprehensive digital upgrade for banking supervision. As part of the digital agenda, BaFin and Bundesbank will seek to obtain and process data more rapidly, improve quality of data analysis, and optimize internal processes of the supervisors. The article has been written by Raimund Röseler (the Chief Executive Director of BaFin) and Professor Joachim Wuermeling (member of the Executive Board of Bundesbank) and was originally published in Handelsblatt on December 26, 2020.
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.
Related Link: Article
Keywords: Europe, Germany, Banking, Banking Supervision, Data Collection, Reporting, Statistical Reporting, Basel, Bundesbank, BaFin
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Previous Article
OJK Publishes Reporting Rules for Commercial BanksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
