Ladies and gentlemen,
There is now broad consensus across Europe that financial sector regulation, supervision and reporting have become overly complex, costly and burdensome. This leads to heavy operational burdens for financial institutions, which must allocate significant resources to ensuring compliance, sometimes at the expense of innovation and agility. This complexity also weighs on supervisors, who must carry out extensive controls and sometimes devote disproportionate resources in terms of the results ultimately achieved.
The remedy for this situation is well known: simplification. It is one of the key recommendations of the Draghi and Letta reports, and we have already begun work on simplification within the SSM, notably with the revision of the SREP, which we want to make more flexible and effective.
However, we must recognise that simplifying regulation, supervision or reporting is not always so simple! As Leonardo da Vinci so aptly put it, “Simplicity is the ultimate sophistication”.
On the one hand, supervisory rules and processes do not simply result from excessive bureaucratic zeal. These rules were often introduced for good reasons; it is rather their accumulation that poses a problem. On the other hand, any simplification process inevitably raises the question of how far to go. The consensus is that we must simplify without deregulating, i.e. without dismantling the entire preventive framework that protects us from a new financial crisis.
In this context, technology can provide part of the solution. It enables us to build powerful tools – known in our supervisory jargon as “SupTech” tools – to optimise the management of our supervisory processes. However, technology cannot do everything, and it is often more effective to consider simplifying the processes themselves before embarking on the construction of SupTech tools: beware of techno-solutionism!
Therefore, we need to reflect on the best way to combine technological innovation – our SupTech approaches – with simplification measures to make our supervision more effective. To contribute to this discussion, I would like to share with you today some lessons we have learned from our SupTech experience at the ACPR in recent years (I), before discussing our current roadmap and future plans (II).
