Digitalisation of Financial Supervision with Supervisory Technology (SupTech)

Journal of International Banking Law & Regulation

21 Pages Posted: 10 Aug 2020 Last revised: 4 Jan 2021

See all articles by Stefan Zeranski

Stefan Zeranski

Ostfalia Hochschule für angewandte Wissenschaften - ZWIRN-Research Center

Ibrahim E. Sancak

ZWIRN-Research Center/Ostfalia University of Applied Sciences

Date Written: August 1, 2020

Abstract

In this article, we discuss and analyse the main components of a digital financial supervisory system with supervisory technology (SupTech). This work offers a new SupTech definition and configures the digital pillars of a financial supervisory system. We contribute to the TECHs in Finance (FinTech, RegTech, SupTech) literature with two new concepts: “prudential supervisory disclosure” and “sustainable finance technology”, or SuFTech.

This work also touches on real TECHs in Finance cases from several countries. We find that the May 6, 2010 market crash at the U.S. financial markets, one of the biggest FinTech crises, addresses the importance of having a well-functioning SupTech system. The case also points out that even a leading technology-producing country or a developed country faces unprecedented FinTech crashes or crises unless the country’s financial supervisors keep pace with technology and develop a well-functioning SupTech system.

Keywords: Supervisory Technology, SupTech, FinTech, RegTech, Financial Supervision, Financial System, Prudential Supervisory Disclosure, Financial Authority, Digital Finance, Digitalization, May 6 Flash Crash, FinTech Crises, Financial Stability, Sustainable Finance Technology, SuFTech

JEL Classification: C88, D47, G18, G20, G28, G38, H11, K22, K23, L15, M48, O31, O32

Suggested Citation

Zeranski, Stefan and Sancak, Ibrahim E., Digitalisation of Financial Supervision with Supervisory Technology (SupTech) (August 1, 2020). Journal of International Banking Law & Regulation, Available at SSRN: https://ssrn.com/abstract=3632053 or http://dx.doi.org/10.2139/ssrn.3632053

Stefan Zeranski

Ostfalia Hochschule für angewandte Wissenschaften - ZWIRN-Research Center

Germany

Ibrahim E. Sancak (Contact Author)

ZWIRN-Research Center/Ostfalia University of Applied Sciences ( email )

Germany

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