<img alt="" src="https://secure.norm0care.com/164647.png" style="display:none;">
Breaking News: Onegini and iWelcome are now OneWelcome | READ PRESS RELEASE  

Financial Supervision in a digital world

Esther Westra
May 28, 2021 at 4:00 PM

The world of Financial Supervision has been undergoing major changes in the last years, for multiple reasons. During the financial crisis of 2008, banking supervision proved to be insufficient. Processes needed to be revised and carried out more thoroughly. On top of that, technological change and regulations such as Open Banking and PSD2 have led to new Fintech players in the market.

A changing financial world

These developments have rapidly been adopted. Consumers value ease of use, and payments and online financial services are no exclusion. Paying online purchases, saving money, ‘low-bar’ investing: there are user-friendly apps for everything. Consumers are loving it, as long as there is a certain amount of trust. Incumbent players needed to respond by shifting focus or diversifying their products. This has led to a total shift in financial products and banking-related services.

Different supervision processes

For supervisors, this shift resulted in a totally different supervision process. Although a bank is a bank, there are way more financial institutions that needed to be supervised. Fintech organisations active in payments and trust funds, insurers that change their scopes, clearing houses, etcetera. And it is not just the amount of organisations that changes. The nature of the data that needs to be collected and analysed is also more diverse than ever.

Traditionally, financial supervision has always been a very manual process. But technology is starting to play an important role in analysing data. For example through the usage of AI processes. This means that structured and unstructured data are collected in a different way than before. New digital portals are being launched, and not all banks and organisations need access to the same portals anymore.

So within supervisory organisations, procedures and portals are being developed and launched for all kinds of information sharing. This has consequences for the onboarding of supervised institutions and the delegation of access rights within these firms. Due to the nature of the information that is shared, processes need to be highly secure, and risks need to be mitigated.

Inefficient login portals

We see a lot of supervisors struggling with these new challenges. Registration and login for new portals is inconsistent. There is no real view of the external business users and no reliable login and access audit information. Who needs access rights, do they still work in the same position, what about sharing of accounts and login credentials? Users complain about the process and don’t deliver in time.

Best practice

Supervised institutions need specific IAM technology to make sure they grant access to the right people within supervised institutions. At iWelcome, we worked together with the European Central Bank, which led to best practices on how to empower supervisors and supervised firms. We centralised the Identity and Access management for different portals in one login platform. This way, the monitoring and audit of access to data and portals is more stable and secure. We use strong user authentication, based on risk.

The advantages of Delegated User Management

Within the European Central Bank, we were able to take IAM a step further. Thanks to the introduction of our B2B IAM functionality, we were able to reduce the administrative burden for supervisors by delegating access to supervised firms. This way, these firms are in control. They get a better user experience and risks are mitigated thanks to a complete view on the actual users. The European Central Bank is one of the youngest central banks in Europe. After the financial crisis in 2008, the ECB became responsible for the majority of supervision in the European banking system. As a start-up, the organisation had to take over responsibility in the Eurozone, but they also managed to keep pace with the digital changes in supervision. National central banks should adopt the same mentality in order to be able to perform their supervisory tasks in this rapidly changing digital world.

Read more about how we helped the European Central Bank open up their digital portals.

Feel free to repost this blog on your website! But when you do so, please be so kind to mention the source and give us a notice via marketing@iwelcome.com.

You May Also Like

These Stories on Security

Subscribe by Email

No Comments Yet

Let us know what you think