An ‘open’ platform for sharing nascent financial and statistical software as public goods has been launched by the Bank for International Settlements (BIS).
BIS Open Tech has been set up in line with the Switzerland-headquartered institution’s overall remit of fostering international co-operation and co-ordination. The open source initiative will house tools for ‘testing, customising and scaling’ that have been developed according to international best practices and standards, and can be reused and further developed by organisations beyond their creators.
The first two projects were published on BIS Open Tech yesterday (31 March).
The first is prototype SupTech (supervisory technology) platform ‘Project Ellipse’, which enables quick access to early-warning indicators, analytics and prudential metrics for banking supervision.
The second is ‘SDMX/FMR’, where ‘SDMX’ stands for Statistical Data and Metadata eXchange and ‘FMR’ stands for Fusion Metadata Registry.
The BIS Open Tech initiative sits within the orbit of the BIS Innovation Hub – the growing network of centres launched in 2019 with the purpose of exploring the development of new tools to improve the functioning of the global financial system.
‘Ellipse collaboration community’ opens up
Project Ellipse has the ‘potential to be a game-changer’ for supervisory authorities, enabling them to be ‘more forward-looking and data-driven’, according to an update from BIS this week.
The platform, which integrates regulatory data and analytics, was developed by BIS alongside the Monetary Authority of Singapore (MAS). It demonstrates how regulatory and other data, such as articles and news, can be integrated into a single platform to help regulatory authorities identify potential risks to individual banks and the banking system, BIS explains.
MAS already plans to ‘adapt the prototype’ for its own use while, via BIS Open Tech, BIS wants to create an ‘Ellipse collaboration community’ in order to ‘share, further test, customise and scale this solution across regulatory authorities around the world’.
The project has to date been undertaken in two phases: phase one investigated how machine-executable digital reporting could enable data-driven supervision, using a cross-border common data model; the second examined how advanced analytics such as machine learning and natural language processing could be applied to unstructured and granular reporting data.
The Bank of England, New York City-headquartered International Swaps and Derivatives Association, professional services giant Accenture and London-headquartered ‘deep tech’ company FNA have also been involved.
‘Greater predictive insights than ever’
Ross Leckow, acting head of the Innovation Hub, described Project Ellipse as “having the potential to be a game-changer by giving supervisors access to more and better data, structured and unstructured, with greater predictive insights than ever before”.
“Recent technological advancements have opened up possibilities for supervisors to leverage on more granular, timely and varied datasets to significantly improve supervisory effectiveness,” said MAS’s deputy managing director for financial supervision, Hern Shin Ho.
“Project Ellipse clearly demonstrates that collection and use of such datasets need not be prohibitive, but can be codified, efficient, cost effective and potentially scalable even on a cross-border basis,” she continued, adding that she hoped other supervisors “will similarly find it useful” and that she looked forward to “further joint initiatives to develop common SupTech solutions.”
The Ellipse collaboration community will initially be a one-year pilot. Interested authorities have until 29 April 2022 to register their interest with the BIS Innovation Hub’s Singapore centre. The platform itself, meanwhile, will be tested for supervision of climate-related financial risk and sustainability metrics – a previously announced next stage of the project dubbed ‘Project Viridis’.
In respect of BIS Open Tech’s second tool, the FMR enables organisations to ‘get a grip’ of their metadata – data that provides information about other data – ‘by externalising their statistical structural metadata with the benefits of maintainability, re-use, standardisation, harmonisation and improved metadata and data governance’, according to BIS’s website.
‘BIS Innovation Hub reveals 2022 workplan’ – our news story (25 January 2022) on the presentation of this year’s Innovation Hub programme (SupTech and RegTech being one of six focus areas)
‘SupTech use rockets but adoption barriers remain: survey’ – our news story (8 Dec 2021) on a paper from the Financial Stability Institute
‘CBDCs and SupTech among priorities as BIS Innovation Hub maps out 2021 agenda’ – our news story (23 January 2021) on the BIS Innovation Hub’s work programme for last year
‘ECB eyes “cutting-edge” tech as it launches first SupTech procurement’ – Global Government Fintech news story (18 January 2021) on the Frankfurt-based authority’s first ‘SupTech’-specific procurement