Digitalisation of supervisory procedures in Germany 

The Commission supported Germany in strengthening the organisational capacity for banking supervision of the Federal Financial Supervisory Authority (BaFin), through a digitalisation of (i) supervisory planning and monitoring and of (ii) licensing procedures. 

It is expected that the implementation of the results of the programme will allow Germany to have an IT tool for the supervisory planning and monitoring processes operational for 2023. 

Context 

BaFin and Deutsche Bundesbank have the direct responsibility of supervising around 1.400 Less-Significant Institutions (LSIs) in Germany with total assets of around €2,670bn. Problems with the licensing or the planning and monitoring of the supervisory activities affect the whole LSI sector in Germany, with significant potential spill-over effects, as the stability of the LSI sector is key to the economic stability. 

Within the context of increased digitalisation of the banking sector, BaFin needs to use its scarce resources more efficiently. It currently faces operational risk and quality issues due to fragmented processes employing various digital tools (paper, PDF, XML, e-mail, MS-Excel). Moreover, it requires a better database  to enable efficient controlling/monitoring of its activities. 

Support delivered 

The programme provides expertise to help the BaFin to digitalise at the same speed as banks and other actors on the financial markets. 

This includes a diagnosis report on the process of supervisory planning and monitoring, a review of existing analysis on licensing procedure and a comparative analysis on best practices from other supervisory authorities (Austria, Finland, Italy, Singapore). Moreover, technical specifications for appropriate IT-environment/IT-tools, offer general advice regarding appropriate maintenance and future development of the process.

Results achieved 

As a result of this project, BaFin has become more efficient and reliable. Moreover, it has achieved adequate real-time monitoring of supervision and licensing processes. Procedures are less time-consuming, the amount of accessible data has increased and operational risks have been reduced. 

The project allowed BaFin to gain knowledge and experience regarding digitalisation, enabling them to be in contact with market participants in this field.