Featured Product

    EU Authorities Issue Updates on DSA and Digital Transformation Survey

    February 17, 2023

    The European Commission (EC) announced that all online platforms and search engines (except micro and small enterprises) will publish their user numbers in the European Union, for the first time, as per the provisions of the Digital Services Act (DSA) and seek consultation on the DSA enforcement procedures, with the comment period ending on March 16, 2023. Additionally, the European Central Bank (ECB) Banking Supervision published the results of a survey on digital transformation and the use of fintech.

    The survey on digital transformation was conducted among 105 large banks that are the direct supervision of ECB, with the goal of assessing the status of their digital transformation. The results of the survey vary across banks, highlighting the following findings in six key areas:

    • Digital strategy and Key Performance Indicator (KPI) steering—Main objectives are becoming more customer-centric in how products and services are offered as a lever to increasing revenues and improving operational efficiency by automating processes and modernizing information technology infrastructures. However, the results show that most banks still face challenges in developing KPIs to monitor digital progress, quantify the impact of digital transformation on their profitability and track effectiveness of implementation.
    • Digital business—Most digitalization strategies are focusing on improving the customer experience and offering digital services and products 24/7. However, keeping track of digital customers and sales remains a challenge.
    • Investments and resources—Most banks do not yet have a dedicated digital transformation budget, but on average one fifth of the IT budget is spent on digitalization.
    • Governance and cooperation—Most banks have in place a coordination body to steer the design and implementation of the digital strategy. The 2nd and 3rd lines of defense are often involved in the implementation and monitoring of the digital strategy. With regard to cooperation, banks prefer to cooperate with external partners, mostly by buying in services (Software as a Service—SaaS) and using consultants. The majority of banks (61%) make use of at least one form of cooperation.
    • Use of innovative technologies—Cloud is most commonly used and seen as a foundation for the use of other technologies. Also, application programming interfaces (APIs) and artificial intelligence are used by most of the banks with increasing business relevance, whereas Distributed ledger technology is used by a very limited number of banks, with crypto-related activities.
    • Risks—Banks face heightened risks of third-party dependency, money laundering, fraud, and cyber-security. These risks require further monitoring and must be taken into account in banks’ governance and risk appetite frameworks. 

    Going forward, ECB plans to continue the work on digital transformation by complementing this preliminary analysis with further investigations in specific areas including targeted reviews and on-site inspections, which will be conducted in the course of 2023 and communicated publicly via the supervision newsletter and website.


    Related Links


    Keywords: Europe, EU, Banking, Digital Services Act, Digital Transformation, Banking Supervision, Fintech, Governance, API, DLT, Artificial Intelligence, Third-Party Risk, Cyber Risk, ML TF Risk, Reporting, Regtech, EC, ECB

    Featured Experts
    Related Articles

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793