#7: Regulatory Innovation and Adoption

Suptech Broadcast

22 May

30th May 2023

With:

| Carmen Barandela (Bank of England)

| Johannes Turner (Austrian National Bank)

The "Regulatory Gap"—the distance between what is happening in the market and what regulators can see—is the primary focus of this discussion. Carmen and Johannes delve into the Bank of England’s and the Austrian National Bank’s efforts to standardize data flows, arguing that the success of Suptech depends entirely on the quality and consistency of the data provided by Regtech.

The guests move beyond technical specifications to discuss the "Institutional Hurdle": the cultural and operational shifts required to move from static, periodic reporting to a dynamic, integrated ecosystem. By exploring the role of Advanced Analytics and Automated Data Governance, this session provides a roadmap for how regulatory bodies can foster innovation without compromising the stability and resilience of the global financial system.

The session covered:

The Coordination Mandate: How supervisors can bridge the gap between their own Suptech tools and the Regtech solutions used by the institutions they oversee.
Standardization as a Catalyst: Analyzing initiatives meant to harmonize data definitions across the banking sector, ensuring that "Risk" and "Liquidity" mean the same thing in every report.
The "Dirty Data" Problem: Identifying the specific roadblocks—from legacy internal silos to poor data entry—that prevent efficient data flow between banks and supervisors.
Machine Learning in Supervision: Exploring new analytic approaches that allow regulators to spot outliers and systemic trends in massive datasets that were previously unmanageable.
Governance Frameworks: Best practices for ensuring that data is not just "collected" but is accurate, auditable, and secure from the moment of inception.
The Resilience Paradox: Why adopting new technology is essential for resilience, yet introduces new risks that must be managed through strict oversight.
Economic Impact: How a more efficient and transparent regulatory environment directly supports broader economic growth by reducing the "Compliance Tax" on financial institutions.