Supervision of the EU financial system relies on data that is timely, relevant and of high quality. The volume and complexity of the data required to oversee the financial system have grown substantially over the last decade. In parallel, there has been a rapid evolution of digital technologies to collect and analyse such data. EU supervisory reporting rules and the way authorities collect and use data needs to keep pace with these developments.
In this context, the Commission carried out a comprehensive fitness check of supervisory reporting requirements in EU financial services legislation. The fitness check concluded that, overall, supervisory reporting in EU financial services is necessary and effective. However, it also showed that the current way of defining the reporting requirements and collecting data can be complex and lead to inefficiencies in the reporting process. There are some redundancies and inconsistencies in the requirements and cases where companies have to report very similar data to several authorities in parallel. Additional national reporting and ad hoc data requests by supervisors add to the complexities. Moreover, EU supervisory reporting requirements do not adequately reflect recent technological developments and are not well-suited to the use of modern IT tools. All this can be costly and burdensome for companies and results in data that is of lower quality and therefore less useful to the supervisory authorities.
The fitness check identified five main areas for improvement: the legislative process and instruments, governance, data needs and uses, data consistency and harmonisation, and technology. In order to address the shortcomings identified in the fitness check and to enable supervisory authorities to seize the opportunities of data-driven supervision, the Commission adopted the strategy on supervisory data in EU financial services on 15 December 2021.
Supervisory data strategy
On 15 December 2021, the Commission adopted the strategy on supervisory data in EU financial services. The Commission’s strategy builds upon the conclusions of the comprehensive fitness check of EU supervisory reporting requirements in financial sector legislation.
The objective of the strategy is to modernise EU supervisory reporting and put in place a system that delivers accurate, consistent, and timely data to supervisory authorities at EU and national level, while minimising the aggregate reporting burden for all relevant parties.
The strategy contributes directly to the implementation of the European data strategy and the digital finance strategy. It also delivers on recent Commission commitments to systematically and proactively seek simplification and burden reduction. Furthermore, by supporting supervisory convergence, the strategy contributes to the objectives of the capital markets union.
The Commission’s long-term vision on supervisory data in EU financial services focuses on four building blocks
- increased consistency and standardisation of data
- better data sharing among authorities
- an improved process for developing and adopting reporting requirements
- joint governance
Delivering these essential building blocks will enable a more effective and efficient use of modern technologies
The development of a modern and more integrated supervisory reporting system is an ambitious, complex, and long-term undertaking. For this reason, work on modernising supervisory reporting in the EU will take a gradual approach and will build on existing tools. The Commission will work with all relevant stakeholders, including EU and national authorities and the industry, to address the identified issues and make the EU supervisory reporting system ready for the future.