SupTech in Europe

Suptech, short for supervisory technology, is software that financial supervisors and central banks use to do their own work: collect reports from banks, check them, read documents and spot risks. EIOPA, the EU insurance supervisor, defines it as "the use of technology by supervisors to deliver innovative and efficient supervisory solutions". The Financial Stability Board describes it as fintech used by authorities for regulatory, supervisory and oversight purposes.

Regtech is the mirror image on the side of the supervised firm. A bank uses regtech to build a regulatory report or to screen payments for money laundering. The supervisor uses suptech to receive that report, validate it and compare it with the reports of other banks. For someone from a bank, suptech explains why supervisors ask for data in a fixed digital format, and why the questions they send back come faster and in more detail than before.

The largest suptech program in Europe runs at ECB Banking Supervision in Frankfurt, which supervises the significant banks of the euro area together with the national authorities. By its own account it has deployed more than a dozen suptech tools, developed together with national supervisors. The ECB suptech tools that banks notice first are the portals:

• IMAS Portal: the channel through which banks submit applications and notifications, for example on qualifying holdings or outsourcing to third parties.
• CASPER: ad hoc data collections, with templates banks can download and submit through APIs.
• STAR Portal: stress test submissions, with an internal side that flags outlier values automatically.

Behind the portals sit the analysis tools. Heimdall reads fit and proper questionnaires by machine; the ECB says it helped cut the processing time of fit and proper assessments from 109 to 97 days. Athena searches millions of supervisory documents with natural language processing, including sentiment analysis, summarization and classification. Agora pulls prudential data into one platform, Navi maps the links between banks as a network graph, and more than 100 robotic process automations finish routine tasks up to 15 times faster than by hand. The ECB also works on generative AI for compliance checks and search, while supervisors keep the final decision.

EIOPA, the European Insurance and Occupational Pensions Authority at Westhafenplatz 1 in Frankfurt, published its suptech strategy for both prudential and conduct supervision of insurers and pension funds. The strategy also notes inconsistencies between European and national registries, a typical suptech problem: tools only work as well as the data that feeds them.

The new EU Anti-Money Laundering Authority (AMLA) has its seat in the MesseTurm in Frankfurt. It is building its own IT architecture, takes over the EuReCA database of AML weaknesses and will directly supervise 40 selected financial firms. For compliance teams, that makes AML the next field where suptech meets regtech head on.

On the research side, the BIS Innovation Hub runs experimental projects and lists suptech as a focus of its hub in London. The FSB survey of its member authorities found that most had a suptech, innovation or data strategy. Their biggest concerns were a lack of resources, then cyber risk, reputational risk and data quality.

Suptech changes the work of the people who answer supervisors. Reports go through portals and APIs instead of email, supervisors run the same checks across all banks at once, and a text answer can be read by a language model before a human reads it. A bank that keeps its data lineage clean answers faster and gets fewer follow-up questions.

Regtech firms in Europe build for both sides. Some sell reporting and screening tools to banks, and some deliver software or data work to supervisors. The regtech answer in the knowledge hub explains the EBA definition of regtech and the duties it serves, and DORA adds a register of all ICT contracts when a bank buys such a tool from a third party.

Finance Loop is the meeting place for compliance, risk and data people from banks and insurers and for the regtech firms that work with them. Finance Loop partnered with the Point Zero Forum in Zurich, which brings together central bankers, regulators, policymakers and industry leaders on finance, technology and policy. It highlighted fAInance, a Frankfurt conference by Sopra Steria and Fraunhofer IAIS on AI governance, risk and compliance and AI against financial crime, and it has a strategic cooperation with Frankfurt Data Science, whose after-work format "AI Governance. From Policies to Practice." took place at TechQuartier. Current dates are on the events page.

Related pages on this site: the EU AI Act in finance and ESG reporting in Germany.

Suptech is technology that supervisors use for supervision. Regtech is technology that banks and other regulated firms use to meet their regulatory, compliance and reporting duties. A regulatory report passes through both: the bank builds it with regtech, and the supervisor checks it with suptech.

Examples from ECB Banking Supervision are Heimdall, which reads fit and proper questionnaires, Athena, which searches supervisory documents with natural language processing, and CASPER, which collects ad hoc data from banks. In general, suptech covers data collection, data validation, text analytics, network analysis and market monitoring.

The ECB runs the Supervision Innovators Conference; its fourth edition drew more than 1,200 participants from supervisors, the private sector and academia. The Point Zero Forum in Zurich puts regulators and industry on one stage. Current finance events are in the events calendar.

Yes. Suptech jobs in Frankfurt are at the supervisors seated there: ECB Banking Supervision, EIOPA, AMLA and the Deutsche Bundesbank. AMLA alone plans to grow to about 430 staff once it is close to full operation. Regtech firms and the consultancies that serve banks hire for the other side of the same work.