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
    News

    HKMA Publishes Hong Kong Taxonomy for Sustainable Finance

    The Hong Kong Monetary Authority (HKMA) published the Hong Kong Taxonomy for Sustainable Finance.

    May 21, 2024 WebPage Regulatory News
    News

    EU Taking Steps to Set Out and Enforce AI Regulations

    Many believe that the transformative power of generative artificial intelligence (GenAI) has potential to reshape the financial sector in the time to come.

    May 21, 2024 WebPage Regulatory News
    News

    ISSB Releases Digital Sustainability Disclosures Taxonomy

    The themes of the harmonization and interoperability of sustainability disclosure standards among various jurisdictions remain at the top-of-mind for international standard-setting bodies.

    May 21, 2024 WebPage Regulatory News
    News

    BCBS Report Studies Implications of Digitalization of Finance

    The Basel Committee on Banking Supervision (BCBS) published a report that examines the implications of the digitalization of finance for banks and supervisors.

    May 21, 2024 WebPage Regulatory News
    News

    BCBS Consults on Guidelines for Counterparty Credit Risk Management

    The Basel Committee on Banking Supervision (BCBS) is seeking comments, until August 28, 2024, on guidelines for counterparty credit risk management of banks.

    May 21, 2024 WebPage Regulatory News
    News

    BIS Paper Outlines Vision for Future Financial System

    In a recent paper, the General Manager of Bank for International Settlements (BIS) and the Indian entrepreneur (Infosys co-founder) Nandan Nilekani have laid out a vision for the Finternet, which is proposed to be a network of multiple financial ecosystems, much like the internet.

    April 29, 2024 WebPage Regulatory News
    News

    NGFS Outlines Options for Supervisory Review of Transition Plans

    The Network for Greening the Financial System (NGFS) recently published three reports on the use of transition plans to boost sustainable finance and manage climate-related financial risks.

    April 29, 2024 WebPage Regulatory News
    News

    BCBS Issues Discussion Paper on Climate Scenario Analysis

    The Basel Committee on Banking Supervision (BCBS) issued a discussion paper on the use of climate scenario analysis to strengthen the management and supervision of climate-related financial risks.

    April 29, 2024 WebPage Regulatory News
    News

    OSFI Issues Phase2 Consultation on Climate Scenario Exercise for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) recently announced a consultation on the second phase of the Standardized Climate Scenario Exercise (SCSE) for banks and other financial institutions it regulates in Canada.

    April 25, 2024 WebPage Regulatory News
    News

    CFIT to Chair Open Finance Taskforce Announced by UK Government

    The UK government announced the formation of an industry-led Open Finance Taskforce, chaired by the Center for Finance, Innovation, and Technology (CFIT).

    April 25, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8967