Home Data ECB looks to ‘Project Olympus’ to transform banking supervision using SupTech

ECB looks to ‘Project Olympus’ to transform banking supervision using SupTech

Elizabeth McCaul: delivered a speech titled ‘The Impact of SupTech on European Banking Supervision’ on 14 September | Global Government Fintech screenshot of video recording

One of the European Central Bank (ECB)’s top banking supervisors has said a “huge amount of collaboration” will be needed to ensure authorities fully capitalise on technology as part of a strategy it has called ‘Project Olympus’.

The ECB oversees more than 100 of the largest banks across the 19-member Eurozone through the Single Supervisory Mechanism (SSM) and, in cooperation with national supervisors, is responsible for ensuring supervision is effective and consistent.

In a speech titled ‘The Impact of SupTech on European Banking Supervision’ delivered on 14 September, ECB Supervisory Board member Elizabeth McCaul described an ambition to “transform banking supervision in the next five years”.

During a 20-minute slot at the ECB-hosted ‘Technology and Banking Supervision Connected’ conference, she referenced the growing number of SupTech initiatives and tools available to Eurozone authorities, and urged supervisory and IT experts to “come together” to connect banking supervision across borders.

“To use our SupTech tools to their full potential, we need to make them available across European banking supervision,” McCaul said. “This entails building the necessary technical foundations to integrate the variety of IT systems in place.”

‘Shared IT landscape’ on the cards

“Our goal is to build a future-proof IT landscape with SupTech solutions embedded within ECB and NCA [national competent authority] systems,” McCaul told the event’s in-person and virtual audience. “That is why we are currently investigating the need for SupTech tools and IT systems across European banking supervision. This includes simplified data flows, better-connected systems and shared solutions. We are looking into the feasibility of scaling up ECB or local NCA solutions to the level of European banking supervision as a whole.”

“As you can imagine, these ambitious efforts – which we call Project Olympus – require a huge amount of collaboration across authorities and business areas. In line with our innovation model, a team of supervisory and IT experts from the ECB and NCAs will define a roadmap and concrete action points for achieving a shared IT landscape. And we plan to lean on our innovation ecosystem in the process as well. I am confident that Project Olympus will be another big step towards digitally enabled banking supervision in Europe,” McCaul, a former Goldman Sachs banker who joined the ECB in 2019, said, adding that the name Olympus (which is the highest mountain in EU member state Greece) was “fitting of the vision that we have for it”.

A trio of the ECB’s SupTech tools – called Heimdall, Agora and Navi – were referenced.

Heimdall, she said, “makes use of optical character recognition, automatic translation and data analytics to reduce the manual workload and the possibility of human error” in the thousands of fit-and-proper assessments that European banking supervisors conduct annually.

Agora gathers all “prudentially relevant information in one place and technically integrates the different datasets”, she said, adding that it was “hopefully a game-changer for prudential analytics”.

Navi (short for ‘Network Analytics and Visualisation’) combines data from different sources to give supervisors a “comprehensive” overview of bank owners and interdependencies using “graph analytics and an intuitive visualisation toolbox”. McCaul said it was “an especially useful tool in the current context of increasing interconnectedness within the financial sector.”

SupTech communication strategy being developed

The ‘Virtual Lab’, a cloud-based SupTech platform that enables remote collaboration across the SSM, was also mentioned. In May last year this was described a ‘game changer’ that would ‘further accelerate innovation’ by then-Supervisory Board member Pentti Hakkarainen (the Finn’s five-year term as a Supervisory Board member ended on 31 January this year).

The ECB has, McCaul said, begun “closely monitoring usage analytics and collecting initial user feedback” on its SupTech tools, including the Virtual Lab.

McCaul said that usage of some tools “already looks very promising” but that the ECB needed to run a SupTech awareness drive. “We are working on a SupTech communication strategy that defines our objectives, key messages and target audiences and sets out a communication toolkit, including short, accessible e-learning programmes for supervisors,” she said.

In his speech last year, Hakkarainen said that “ECB banking supervision not only makes use of modern technology but also aims to become a SupTech pioneer”. In the speech, which was titled ‘The necessity of using supervisory technology’, he also spoke of “more than 100 SupTech tools under development across European banking supervision”.

He also referenced a dedicated unit within the ECB – the ‘Suptech Hub’ – to facilitate all innovation work and ‘better connect IT and supervisory experts’, adding that the ECB had also created interdisciplinary innovation teams in the spring of 2021.

McCaul: preference for ‘in-house’ innovation  

In terms of SupTech skills, McCaul said that “more than 1,000 colleagues” had been trained on topics such as artificial intelligence (AI) and digitalisation, and the ECB had partnered academia to provide staff “at all levels” with “state-of-the-art knowledge on these and other topics relating to innovation and digital technologies”.

A ‘Data Science School’ using online learning platform Coursera will be “rolled out” to all European banking supervisors “over the next few weeks”, she said. This was initially launched at Banco de Portugal in June 2020.

Global Government Fintech broke the news earlier this year that the ECB had completed its first ‘SupTech’-specific procurement – with a potential spend of up to €227.5m (about £199m) – as it strives for ‘pioneer’ status in its use of emerging technologies.

Work is split into two ‘lots’: the first for ‘SupTech digital transformation delivery including business process re-engineering and the deployment of emerging technologies’; and the second for ‘brokerage of emerging technologies exploration, prototyping and training services for banking supervision and central banking’. Five contractors were appointed in ‘lot one’: d-fine; IBM (Deutschland); NTT DATA Deutschland/NTT DATA Belgique; Oliver Wyman and Senacor FCS. ‘Lot two’ was awarded to a consortium comprising Intrasoft International, business school INSEAD and GFT Italia. The contractors’ success in the process does not guarantee specific assignments, with the ECB allocating work via what are called ‘call-offs’.

During a short Q&A after her speech McCaul was asked about the split between ‘in-house innovation and third-party solutions’ in the context of the ECB’s overall SupTech ambitions. “I would like to see it come much more in-house,” McCaul responded. “I think we have the best and brightest here [in-house]. We’ll need to have third-party consultants and solutions that we evaluate and use but there’s a great deal we can be doing on our own, especially replacing consultants with our own people. I think that would be a very powerful thing to be doing.”

McCaul was also asked what role she envisaged for supervised entities (private banks) themselves. “I see their role as working with us to deliver data but to do it in a really seamless way,” she answered. “I understand the People’s Bank of China [China’s central bank] has 20,000 supervisors […] and 200 people working directly in bank systems to obtain the data they need to do the supervision. Wouldn’t that be amazing [to have in Europe]?”.

ECB Supervisory Board: who are its members?
Andrea Enria (chair)
Frank Elderson (vice-chair)
Edouard Fernandez-Bollo; Kerstin af Jochnick; Elizabeth McCaul; Anneli Tuominen (four ECB representatives)
Plus: representatives of national supervisors


‘ECB completes €200m-plus procurement as it looks to “pioneer” SupTech innovation’ – our news story (29 April 2022) on the ECB completing its first SupTech-specific procurement

‘SupTech use rockets but adoption barriers remain: survey’ – our news story (8 Dec 2021) on a paper from the Financial Stability Institute (FSI) that set out how travel restrictions and social distancing protocols ‘severely curtailed’ on-site inspections and prompted financial authorities to use more SupTech tools for their day-to-day oversight of companies

‘ECB eyes “cutting-edge” tech as it launches first SupTech procurement’ – our scoop (18 January 2021) on the launch of the SupTech procurement