SupTech trends in 2021: data, analytics & security

Through 2021, the phenomenal growth in the volume of data that financial regulators collect will continue. The accelerating rate of change worldwide is resulting in emerging trends including greater adoption of AI, machine learning, and evolved regulatory data management approaches such as granular data. The Covid-19 pandemic has resulted in a greater emphasis on and investment in digital transformation.  

According to Forbes Technology Council: “though the pandemic has upended businesses across almost every conceivable sector around the globe and placed a historic strain on worldwide supply chains and economies, it has forced the acceleration of digital transformation and AI. Rapidly developing, powerful and innovative AI applications are emerging as a result, illuminating AI's ever-growing value and immediate need.” 

Supervisory technology trends around AI and machine learning 

Since 2008, many financial regulators have been overwhelmed by this accelerated pace of change. The crash caused a sudden move from light-touch regulation to extremely tight regulation. This led to an explosion in the volume of data that regulators need to process. 

Interestingly, while blockchain (or more specifically DLT) is making waves in various ways across financial services, we have explored the technology and we see no viable use case for it within SupTech at this point, but we are keeping a close eye on blockchain trends. 

Advanced analytics for financial regulators 

Another trend we’re likely to see more of in 2021 and beyond is the use of advanced analytics. A core benefit of SupTech is the ability to identify trends and predict problems before they occur. AI and machine learning can be used to spot trends in data that would be almost invisible to the naked eye.  

This is already happening at the European Central Bank, where the technology is used to spot trends across multiple jurisdictions.

The ECB is also using advanced analytical models to gain new insights from the vast amounts of data it holds. In the context of the Covid-19 crisis, supervisors are applying advanced analytics to identify emerging trends across banks

ECB

The ECB appears highly interested in the benefits of SupTech. One of the more interesting trends to watch out for in 2021 may be the widespread adoption of SupTech across the EU and especially the eurozone. Using these analytics can offer financial regulators greater intelligence around trends. To interpret these trends, many organisations will likely be recruiting data scientists in 2021. 

Security 

Naturally, as more data is held digitally, cybersecurity is an increasing concern for governments, regulators, and financial institutions. Due to the sensitive nature of the data financial regulators process and hold, we have an extremely robust level of security.  Tenders for government projects with central banks and other regulators are extremely rigorous, with extensive risk analysis around potential cyber-security attacks, so our standards are scrutinised regularly. 

Monitoring supervisory data collection trends in 2021 

Our experienced team of analysts is paying careful attention to emerging trends in SupTech. As the pace of digital transformation continues to accelerate, we examine each innovation and look at integrating those with SupTech use cases into our offerings. 

As AI, machine learning, and granular data will become more mainstream, we will be at the vanguard of implementing these technologies for financial regulators.