The data-driven supervisory authority of the future: Part 2

By Hanno Dachwitz and Julian Gulden

Most supervisory authorities have already embarked on their journey to become fully data-driven organizations, as we saw in a previous report. But with data continuing to pour in and AI tools proliferating, many are now urgently looking to take the next step. What should they do? Our new report offers a way forward.

In a world where data is becoming key, it is crucial for organizations to become data-driven. Supervisory authorities are no exception. Only by processing and leveraging data more effectively and comprehensively can they ensure financial stability within the market and keep pace with fast-changing regulations.

Regulators have recognized this and many have already begun their journey toward becoming fully data driven. We outlined the challenges and strategies involved in this initial step in our last report (2022). But since then, the impetus to become data-driven has accelerated fast, not least due to the rapid rise of artificial intelligence (AI). In 2023, global spending on AI-centric systems was estimated at USD 154 billion, for example. Having laid the foundations, supervisory authorities now need to navigate the next steps of their transformation.

Our new report, “Fit for the future – Part II: Advancing to the next level of a data-driven supervisory authority”, is designed to support them. It outlines a conceptual five-phase approach for the transformation path, focusing on two crucial intermediate phases between the initial conceptual groundwork and fully fledged implementation. These include completing organization-wide roll-outs of successful pilots and final conceptualization.

The report also assesses potential stumbling blocks that could be encountered in the intermediate phase – and solutions to overcome them.

Key analysis

We have supported several supervisory authorities on their journeys to become data-driven organizations. This has enabled us to identify and map similarities and recurring challenges within the transformation process, and develop a conceptual approach to it. The five phases of our approach are: I. Strategy development & piloting; II. Initial implementation; III. Refinement & concept finalization; IV. Implementation & comprehensive rollout; and V. Post-transformation organization.

Many authorities are currently facing embarking on Phases II and III, the pivotal part of the approach. Phase II aims to further strengthen the foundation of the transformation and build experience. It serves as the transitional phase from initial strategy development and piloting to broad organizational anchoring of proven concepts. In the report, we provide a self-assessment check list to ensure supervisory authorities are ready to move to Phase III.

Phase III, the main focus of the report, aims to finalize the detailing of concepts for all areas within the data-driven transformation and prepare the organization for comprehensive implementation. It represents an intermediate stage between the laying of foundations in Phases I and II, and the fully-fledged roll-out and finalization in the last two phases. The report provides a comprehensive deep dive into navigating the phase and achieving its aims.

Lastly, the report looks at potential pitfalls along the journey to becoming fully data-driven, drawing on our experience to offer remedies. These challenges, which include resistance to change and unrealistic goals, need to be addressed strategically and clearly in advance.

For more information, please download a copy of the report, or feel free to contact one of our experts.

This report was developed with the support of Maud Jackstädt

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