In a keynote speech at the 2024 Supervision Innovators Conference, Elizabeth McCaul, a Member of the Supervisory Board of the European Central Bank (ECB), reflected on the evolution of European banking supervision over the first ten years of the Single Supervisory Mechanism (SSM) and outlined the future of supervision under its new 2024-2028 tech strategy.
The strategy is built around two pillars: people and technology. Highlighting the impact of societal, technological, and economic trends, McCaul noted, "We are in the midst of a fast-paced and unprecedented development which is changing every aspect of the economy." McCaul stressed the importance of integrating advanced supervisory technology (suptech) into day-to-day work, enabling supervisors to operate as a single team using shared IT systems across the ECB and National Competent Authorities (NCAs).
The strategy focuses on three key clusters: strengthening core IT systems, enhancing supervisory analytics, and increasing automation. The first cluster aims to consolidate IT and promote a culture that supports the adoption of suptech tools. The second seeks to improve risk assessment by combining structured and unstructured data, while the third focuses on using AI to automate processes and boost collaboration.
McCaul also emphasized global partnerships and the need for continuous technological investment to address the evolving risks in banking. Quoting American sociobiologist Edward O. Wilson on humanity's mix of "Palaeolithic emotions, medieval institutions, and godlike technology," she underscored the complex challenges facing supervision as it adapts to meet the demands of modern technology and financial risks.
For more from Elizabeth McCaul, read her Preamble to the 2024 Compendium.
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