BANKING SUPERVISION THROUGH SUPTECH
Authors: Ababii Victor 
Published: July 2024

Victor Ababii
E-mail: ababii.victor@gmail.com
PhD student, Academy of Economic Studies of Moldova Head of Division, Reporting and Statistics Department, National Bank of Moldova
Chișinău, Republic of Moldova
https://orcid.org/0009-0008-9573-0204
 
Abstract: The banking system requires continuous development to enhance stability and integrity of the financial sector by implementing the latest technological tools. Maintaining a sustainable financial system, resilient to the shocks generated by the digital age and able to adapt and prevent emerging cyber risks remains a priority for supervisory institutions, in response to financial supervision and risk management framework through leveraging state-of-the-art technology for better governance and control. SupTech's primary objective is to promote inclusion in the financial sector by focusing on governance management and digital financing. It`s goal is to support the development of an inclusive financial system built on a robust digital infrastructure that enhances efficiency, transparency, and resilience. As technological innovations advance, financial services have to evolve, requiring financial institutions to adapt their surveillance technologies (SupTech) to safeguard citizen interests. Establishing both normative and technical SupTech frameworks helps supervisory authorities to eliminate gaps in internal processes, streamline workflows, fortify risk management, protect consumers, and maintain financial system stability amid ongoing market changes. Implementing a SupTech framework involves several stages: diagnosing the institution's current state, defining the purpose, vision, and objectives of SupTech, identifying key drivers and adaptive capabilities, evaluating necessary actions, and detailing steps for successful implementation.
A thorough diagnosis of the supervisory institution involves IT solutions that facilitate continuous bank monitoring and offsite supervision. This diagnostic analysis includes:
(1) Data products – identifying the position and trends to reach the level of AI-augment business intelligence tools;
(2) Analytics – aiming to implement analytics tools perspectives;
(3) Access controls - with the position on the agency - wide access;
(4) Storage – oriented towards the use target of big data tools;
(5) Validation and processing – aiming at the use of advanced data processing;
(6) Collection – using the latest AI-based collection trends or alternative data sources.  
Configuring the SupTech framework involves transforming vulnerabilities into opportunities. For example, automating data flows can address deficiencies in manual data handling, risk assessment, and report generation. Implementing a data warehouse can solve challenges related to data consolidation, multiple analysis tools, system integration complexity, and data correlation.
SupTech aims to provide supervisory authorities with reliable, high-quality data, aligning with best practices in governance and data management. This ensures consistency in the supervisory process and resilience to technological advancements. Digitizing surveillance processes is crucial for operational efficiency, with advanced analytics and business intelligence solutions enhancing surveillance information and decision-making.
 
Keywords: SupTech, Fintech, Regtech, risks, data model.
 
JEL classification: G21