Access to better technology for (Supervisory) Reporting

On 18 February 2022, the four European banking associations (EACB, EAPB, EBF and ESBG) co-hosted the “Access to better technology for (Supervisory) Reporting” workshop that brought together the entire European banking industry, the European Banking Authority and the international RegTech community to openly exchange views and learn from each other on how RegTech solutions could help banks reduce their reporting costs and what are the hurdles to clear along the way.

300 participants across Europe participated in this half-day, targeted workshop. The presentations delivered by the banking industry clearly revealed the many challenges and complexities the industry has been facing for about 15 years due to the flood of additional data reporting requirements to banks. Data has never been as important as it is now with regulatory reporting having shifted from a simple administrative task in the past to a strategic objective high in the agenda of banks and a steering tool, with supervisors placing increasing focus on data quality. The current situation is the result of a layering of successive regulations, by different authorities at national and EU level, with the added complexities of different definitions and shorter delivery times demanding substantial investment by banks in systems, processes, and specialized staff. Banks have been mastering these challenges very well, generally speaking, but there is always room to become even more efficient.

While there are existing cases where banks are already benefitting from the use of technology either from in-house solutions or by creating a shared utility as result of a joint venture or other forms of pooling of resources by a number of banking groups in a country, the discussion revealed there is still ample room to explore and lot of work ahead to benefit from technology at a large scale.

A dedicated panel composed by RegTechs based across Europe confirmed that technology is available or is being developed to support banks with a wide range of services offering from end-to-end to targeted solutions. RegTechs also confirmed complexity is the most challenging aspect in the current reporting environment identifying standardization, infrastructure, and automation as tools to decrease the complexity.

The different ways regulatory reporting is done in Europe also adds complexity. Creating a more functional and interconnected ecosystem is key to start moving towards a much-needed standardization where RegTechs can play a key role. Replying to questions raised by the banking industry, RegTechs stressed that technology should be seen as innovation that could help banks reach beyond the 15-24% cost reduction as estimated by an EBA study last year, rather than a black box that brings its own complexity. RegTechs are also trying to remove barriers by intensively promoting their services for which forums like the workshop organized by the trade banking associations was an ideal setting to bridge the gaps between RegTech and the banking industry.

With a forward-looking perspective, the EBA provided an overview of how the different recently launched initiatives such as the Integrated Reporting System and the Commission’s supervisory data strategy aim to shape the future of supervisory reporting. The challenge is big, but the benefits are worth. The banking industry, RegTech community and supervisory authority agreed events like the workshop are key to foster collaboration and they will stay in close contact.

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Clear and fair rules for the use of machine learning in Internal Rating Based models

The European Savings and Retail Banking Group (ESBG) welcomes the initiative of the European Banking Authority (EBA) to discuss the implications of the use of machine learning (ML) in the internal rating based (IRB) models for credit risk.

We encourage the EBA to build a clear and fair supervisory scheme that goes further and allows compliance with the proposed principles to be measured, and that finds the balance between the advantages and the new risks that machine learning brings.

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Proportional and clear guidelines would ensure citizens' data protection and foster innovation

The ESBG, together with eight other associations representing the EU payment sector, has written to the European Data Protection Board, the European Commission and the European Banking Authority about the EDPB Guidelines 06/2020 on the interplay between the reviewed Payment Services Directive (PSD2) and the General Data Protection Regulator(GDPR).

The letter highlights that while the payments sector remains fully committed to ensuring the protection of EU citizen’s data- including within the framework of PSD2 – there are concerns that the enforcement of the Guidelines will lead to an outcome that is not in line with PSD2 objectives. In the end, this would hinder innovation and competition in payments.

Although the final Guidelines help in clarifying certain aspects of the interplay, our letter emphasises and reiterates common concerns:

  • Provisions on data minimization create uncertainties and are potentially in conflict with PSD2;
  • There is lack of coherence with the Regulatory Technical Standards on Strong Customer Authentication and Common and Secure Communication (RTS on SCA & CSC);
  • Financial transaction data should not be considered as special category of personal data (SCPD). As such, if financial transaction data is not processed in order to infer SCPD, Article 9(1) GDPR should not apply.
  • There are resulting concerns that national Data Protection Authorities could start taking a differentiated approach to the interpretation of the provisions, resulting in fragmentation across the EU and adding to a growing trend when it comes to GDPR implementation.

Overall, the EU payments industry welcomes further discussion between all relevant institutions and stakeholders in the GDPR-PSD2 ecosystem to address these challenges and to provide legal certainty for all actors to enable them to meet their obligations and continue to provide top-tier services for their customers.

READ THE FULL JOINT LETTER

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ESBG welcomes the financial competence framework by the European Commission and OECD

ESBG Managing Director, Peter Simon, shares the vast experience of European Savings and Retail Banks on financial education during panel discussion.

BRUSSELS, 25 January 2022 – The European Savings and Retail Banking Group (ESBG) applauds and welcomes the ‘Financial competence framework for adults in the European Union’ launched today by the European Commission (EC) and the OECD’s International Network on Financial Education (INFE).

“This framework provides much needed guidance to ensure citizens are prepared to make sound financial decisions that help them prosper and build resilience across all Member States”, said ESBG Managing Director, Peter Simon, who participated in a panel discussion to launch the initiative.

“Building financial education and literacy is part of European Savings and Retail Bank’s DNA and history, who have been carrying out for decades a number of different financial education programmes with the greatest dedication. Together with our members, ESBG can only celebrate an initiative from the public sector that aims at the same goal, which is to empower citizens to make the right choices for their financial well-being”, he added. “We all need to work together”.

In particular, ESBG applauds the fact that this framework, which includes 563 personal finance competences, focuses not only on building knowledge but also skills across all age groups.

The framework builds on the OECD’s existing one, updating it to the EU context and enriching it with more detailed digital and sustainable finance competences. It is made available for voluntary uptake in the EU by public authorities, private bodies and the civil society.

It was published on 11 January and launched today on a virtual event by European Commissioner Mairead McGuinness, and OECD Secretary General, Mathias Cormann. The announcement was followed by a panel discussion with industry experts.

WATCH THE RECORDING OF THE PANEL DISCUSSION

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Conference on cyber security in banks

Cyber security and fighting cyber crime are among the top concerns for all banks across the globe.

News on identity and data theft, various cyber-attacks, security breaches resulting in large losses, make regular headlines. The global pandemic has further increased cyber risks as criminals attack mobile phones, notebooks and PCs used for communication between home and main office. Are we ready for the challenges? Banks are spending substantial amounts to prevent ICT and cyber security breaches and improve their defenses against cyber risks.​

During the conference a panel of excellent speakers will describe the latest threats and how to deal with them, introduce state-of-the-art solutions in malware detection, firewalling, intrusion prevention, fraud detection, incident response and other defensive techniques.


"It's the labour supply, stupid"

The coronavirus (COVID-19) shock affected some demographic groups’ labour force participation rate differently from what past cyclicality would suggest.

Guest Speaker

Edward Scicluna is Governor of the Central Bank of Malta and Deputy Chairman of the Malta Financial Services Authority, after having served as Malta’s Minister for Finance (2013-2020). He also served as an MEP and Vice-Charmain of ECON (2008-2013). His previous appointments included that of Professor and Head of the Department of Economics at the University of Malta (UoM), and Chairman of the MCESD. Edward graduated from the University of Oxford with a Diploma with distinction in politics and economics; from the UoM with a First Class Honours BA degree. He read for his Masters and Doctorate in Economics at the University of Toronto.

About the topic

​The coronavirus (COVID-19) shock affected some demographic groups’ labour force participation rate differently from what past cyclicality would suggest. The assessment, however, depends on the counterfactual scenario used, i.e. the assumption of what would have happened in the absence of the pandemic shock. Using counterfactual scenarios that take the pre-pandemic trends into consideration, the labour force participation rate gap – i.e. the difference between the observed labour force participation and the no-pandemic-shock counterfactual – is the widest for older workers and for workers with lower and…(click to read more)

Programme

14h30 – Welcome, short introduction by ESBG of the topic and the guest speaker

14h35 – Guest speaker’s presentation

15h00 – Q&A moderated by Sebastian Stodulka, ESBG Head of Regulatory Affairs

15h15 – Closure

About ESBG

The European Savings and Retail Banking Group (ESBG) has 23 members in 18 countries. As some of its members are national organisations, ESBG represents the interests of over 800 banks working responsibly and closely with their communities and SMEs. Together, ESBG members manage assets worth €5,700 billion, serve 162 million Europeans and employ nearly 660,000 people.

About the Central Bank of Malta

The Central Bank of Malta is the central bank of the Republic of Malta. It was established on 17 April 1968. In May 2004, when Malta joined the European Union, it became an integral part of the European System of Central Banks.


WSBI ESBG Events


Daisy chain of internal MREL

The “daisy chain” deduction framework increases the necessity of legal certainty, predictability, and proportionality in the internal MREL (iMREL) regulation.

Resolution groups with entities in only one member state should be exempted from the “daisy chain” deduction framework. The transitional period for applying the requirements should also be extended to 1 January 2024. Moreover, ESBG warns that the introduction of the “daisy chain” proposed by the European Commission in late October should explicitly not increase other prudential requirements for banks. Finally, the scope of application of iMREL should be fixed at 5% of Total Risk Exposure Amount (TREA) for non-resolution entities in the level 1 text and not left at the discretion of the Single Resolution Board (SRB) as is currently the case.

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Dominique Goursolle

ESBG elects Dominique Goursolle-Nouhaud as new president

The first woman president of the European Savings and Retail Banking Group (ESBG) is Dominique Goursolle-Nouhaud, president of the National Federation of French Savings Banks. She was elected today by the ESBG General Assembly for a period ending in 2024.

Dominique Goursolle-Nouhaud was elected today as president of the European Savings and Retail Banking Group (ESBG) for a three-year term. She is the first woman to occupy the position. She succeeds Helmut Schleweis, president of the German Savings Banks Association.

Together with ESBG members, Dominique Goursolle-Nouhaud will represent the specific model of savings banks, cooperative and retail banks at the European level. She is committed to showcase the social and economic contributions of the ESBG members to their communities.

She is committed to ensure that the specificities of the business model of the ESBG members are considered by EU policymakers. With ESBG, she will stand for a proportional application of regulation and supervision.

“We must defend the added value of our model”, said Dominique Goursolle-Nouhaud as she was elected. “Our strength today is to remain united to rise to the challenges of tomorrow. Let’s be stronger together”.

The members of the ESBG president committee are:

Isidro Fainé, president of CECA (Confederación Española de Cajas de Ahorros);
Helmut Schleweis, president of the German Savings Banks Association (Deutscher Sparkassen- und Giroverband);
Jens Henriksson, president and CEO of Swedbank;
Gabriele Semmelrock-Werzer, president of the Austrian Savings Banks Association (Österreichischer Sparkassenverband); and
Gerhard Brandstätter, Chairman of Cassa di Risparmio di Bolzano SpA.

About the National Federation of French Savings Banks

The National Federation of French Savings Banks (Fédération nationale des Caisses d’Epargne) is the body that represents 15 savings banks and regional cooperative banks, as well as their 4.5 million members and 2,600 elected representatives. Its main missions are to coordinate and strengthen the relation between the savings banks and their members/customers; to represent their common interests, in particular towards the public authorities; to support and train the elected representatives of the members; to define, coordinate and promote the social and environmental responsibility actions of the savings banks.

About ESBG

The European Savings and Retail Banking Group (ESBG) has 23 members in 18 countries. As some of its members are national organisations, ESBG represents the interests of over 800 banks working responsibly and closely with their communities and SMEs. Together, ESBG members manage assets worth €5,700 billion, serve 162 million Europeans and employ nearly 660,000 people.

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Call for evidence on the European Commission mandate regarding the PRIIPs Regulation

In Europe there are many PRIIPs that retail investors can purchase. In the area of structured products (PRIPs) alone, there are more than 1.5 million of them.

Regarding the use of the Key Information Documents (KIDs) to choose or compare between the products that banks offer to their clients, we believe that they do not play a role in product selection per se; there are other sources of information and the KIDs, which are designed for retail investors, are not suitable as a basis for product comparisons by the sales offices. For product approval purposes, the sales offices have designed separate technical solutions to obtain the required information. These tools allow, for example, the filtering of products according to certain product designs such as capital protection or certain underlings. However, there are individual contents of the KIDs that are used by the institutions for product selection. This includes, for example, the SRI, which is also used for the target market under MiFID II product governance.

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