In a speech delivered at the Innovate Finance Global Summit earlier this week, Cecilia Skingsley, Head of the Bank for International Settlements Innovation Hub, called for public-private partnership to drive supervisory technology (SupTech) development.
"We, as in the public sector, need to join forces with you in the private sector to build technology solutions that can shape the future of supervision and support financial stability," Skingsley argued. Acknowledging that some vendors may struggle to engage with the public sector due to a lack of clarity around objectives, specifications, and priorities, Skingsley encouraged public sector entities to become "better customers."
"We need to better articulate our needs to the market and find ways to be more inclusive," she said. "In this way, we benefit from all the choices available in the SupTech marketplace and continue to be up to date with the latest technologies. We might be missing a lot. We don't know what we don't know."
Another key pillar of encouraging SupTech innovation will be transparency and honesty, Skingsley stated. Central banks and supervisors face many challenges as they seek to modernize their systems, technology infrastructure, and supervisory tools. If these organizations are not able and willing to honestly assess and communicate where they stand in these regards, digital transformation will be much more difficult.
"[I]n our view, Suptech innovation continues to be essential to safeguarding our financial system," Skingsley concluded. "All of us — central banks, supervisors and regulators, the private sector — need to focus on this important task. To best achieve it, we need to operate within a framework that combines recognising the needs of multiple stakeholders with working more effectively with the private sector."
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