The necessity of

using supervisory
technology

33rd Annual Conference of

BSCEE

27 May 2021 Pentti Hakkarainen, Member of the Supervisory Board

Agenda

1 The ECB Banking Supervision’s “digital innovative house”

2 Conclusions

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 The ECB Banking
Supervision’s
“digital innovative
house”

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Our vision is that European banking supervision transforms into a truly
innovative house based on four building blocks

The SSM will become a leading digital practitioner among the

banking supervisors in the world

SupTech

Implement state-of- Reinforce

the-art innovative Deliver Build an connections and
tools for supervisors, impactful effective break silos to reap
enhance systems Suptech innovation synergies across
and digitalise and use cases model in the the ECB and in the
automate processes SSM SSM

Provide supervisors
Actively engage
with the skills and Foster a Create an
academia, industry
mind-set to fully digital innovation
and start-ups and
engage in culture ecosystem
benefit from global
digitalisation
partnerships

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 Implementing an
innovation model

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 Build an
effective
innovation
In 2020, the SSM Digitalisation Blueprint was developed setting
model in the
SSM out a clear action plan to build an innovative SupTech portfolio

Jun. – Sep. Oct. – Nov. End Nov. 2021

• Start of the execution
• Collection of a wide phase in a staggered
range of ideas across approach with agile
the whole SSM work in
resulting in over 120 multidisciplinary
120+ 42 24
use cases innovation teams

Ideation Assessment Priorisation Execution

• Assessment of all ideas based on a • Prioritisation of use cases based

robust innovation management on business value and ease of
framework and clustering into 42 implementation drilling down to 24
high value use cases

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 Build an
effective
innovation
We have established a solid organisational model that ensures
model in the
SSM SSM-wide collaboration to develop the identified use cases

Steering
Committee Digital
Agenda SSM Innovation
teams

• Provides strategic guidance on • Connects supervisors and IT • Gathers togethersupervision,

innovation and digitalisation for experts across the SSM IT and Suptech experts from
the SSM across the SSM
• Contributes to the identification
• Fosters commitment to the of business needs • Leverages on a diverse skillset,
digital transformation flexibility and agile composition
• Facilitates various SupTech
• Ensures successful project initiatives • Develops SupTech projects
implementation across the SSM

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 Fostering a digital
culture

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Foster a
digital We are providing supervisors with the right capabilities and
culture
mind-set to fully leverage the SupTech potential…
Culture building initiatives

• Connect skilled people from SupTech Global SSM-wide

various backgrounds Conference Workshops

• Provide supervisors with

possibilities to exchange and
SupTech community page Virtual Lab
develop innovative ideas

• Fully engage supervisors in

digitalisation

• Build a shared digital culture

across the SSM

SupTech SupTech Innovation

Survey Contest

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Foster a
digital … and we train hundreds of supervisors in the use of artificial
culture
intelligence for banking supervision

• The programme provides 500+
SSM colleagues with a practical
way of accessing the world of
AI
• Through the best-in-class
format it gives an opportunity to
reflect on AI possibilities and
limitations in the SSM context
• This will help to position our
community at the forefront of
SupTech developments
Duration
6 weeks journey
Format
Blended: self paced
e-learning and 6 live sessions
Content
SSM AI training programme Fundamentals on AI application
Workshops on industry and SSM
AI case studies from the ECB
and NCAs

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 Building an
innovation
ecosystem

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 Create an
innovation At the same time, we are building a powerful innovation
ecosystem
ecosystem for the SSM

Academia
+ Joint Research Center (JRC) /
Global Events and
University of Parma (UP) Conferences
+Technical University Darmstadt, + SupTech Global Conference
University of Porto

Other Authorities
+ BIS Hub
+ Financial Stability Board
+ European Commission/JRC
Start-ups
+ Applied AI & Innovation broker
+ European Commission/start-up
Europe
Position the SSM as part of a global
innovation ecosystem

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 Delivering impactful
SupTech use cases

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 Deliver
impactful
suptech use
At the core of our digital transformation, we are delivering
cases
impactful SupTech use cases in six priority areas

e.g. Textual analysis with NLP

e.g. the IMAS Portal

1 Level-up supervisory reporting

and exchange with banks via end-
4 Advance the analysis of
documents and unstructured data
via AI-driven textual analysis
to-end digitalisation
Transform the SSM into a e.g. Speech-to-text
e.g. Network analytics

2 Harness the power of data with

advanced analytics and cutting-edge
leading digital practitioner
among banking
5 Reduce manual tasks and
increase information control
data architecture through process automation

supervisors in the world

3 Boost SSM IT systems by fostering
user-orientation, connectedness and
6 Provide smart collaboration tools
for SSM-wide digital exchange
SupTech integration

e.g. the Virtual lab

e.g. cloud-based solutions

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 Conclusion

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European banking supervision is taking a major effort to
drive the digital agenda further

Innovation in Suptech is necessary for banking supervisors

As the industry embraces digitalization, supervisors should innovate as well

Technology offers opportunities to better and quicker understand banking risks

Automating routine tasks will allow supervisors to target their attention

Global collaboration on SupTech benefits all supervisors

Open sharing of ideas among supervisors creates synergies

Exchange of best practices helps to identify optimal solutions

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