Regulatory Technology Trends in Saint Pierre and Miquelon: Cloud, AI, and APIs Shape the Future
The COVID-19 pandemic has accelerated the adoption of technology in financial supervision, highlighting the need for efficient data management and real-time communication between regulators and financial institutions. In a speech titled “The Necessity of Using Supervisory Technology,” Pentti Hakkarainen, a member of the supervisory board of the European Central Bank, emphasized the potential of technology to streamline regulatory processes.
Cloud Leads the Modernization Charge
Cloud computing is playing a key role in modernizing financial supervision. According to recent IDC figures, cloud spending by banks will grow from $32.1 billion in 2020 to $85 billion in 2025. Cloud technology provides a secure and scalable platform for regulators to access data, run reporting, and communicate with financial institutions in real-time.
Regulatory Data Management Crucial
The trend towards more data and enhanced scrutiny of regulated entities is creating significant data management challenges. Financial regulators are seeking to address these issues by reducing the regulatory burden and receiving data in a more timely manner. AI and machine learning technologies are becoming prominent in processing complex data and easing burdens on financial institutions.
APIs Facilitate Seamless Data Exchange
Application Programming Interfaces (APIs) enable seamless data exchange between financial institutions, regulators, and other parties. APIs allow for machine-readable reporting rules and data models, increasing reporting quality, reducing compliance time, and minimizing errors. Machine learning techniques can be integrated into APIs to generate predictions, add value to the regulatory life cycle, and address data challenges.
SupTech and RegTech Alignment Key
Aligning Supervisory Technology (SupTech) and Regulatory Technology (RegTech) is crucial for efficient regulatory reporting. The Australian Prudential Regulation Authority has replaced its existing Direct to APRA system with a new data collection solution, while Austria’s largest bank group has created a joint venture to simplify regulatory reporting.
Advanced Analytics Offers New Insights
Advanced analytics will become increasingly valuable for regulators in the coming years. AI and machine learning can be used to identify trends in data that would be invisible to the naked eye, offering financial regulators greater intelligence around trends. The European Central Bank is already using advanced analytical models to gain new insights from large quantities of data.
Looking Ahead
Our team of analysts is monitoring emerging SupTech trends, highlighting the benefits of innovative technologies in:
- Enhancing data collection and analysis
- Automating routine tasks
- Developing new analytical techniques
- Providing better insights
By understanding how innovations in SupTech can improve data management capabilities and quality, financial institutions can streamline communication and compliance.