International financial institutions are enthousiastic about digital supervisory tools, ‘suptech’. In an earlier article I wrote about the need for granular data for suptech tools, according to a publicaton by the Bank for International Settlements (BIS) [1].

Recently I read a speech by an official of the European Central Bank (ECB) [2] on suptech tools. Her enthusiasm for new technology is great, with AI being called ‘disruptive’, which reminds me of the time when Uber was still called ‘disruptive’ (has since been exposed as a villain that evades taxi laws). ECB is looking for new granular data, to be able to address emerging risks:

To do so, we must explore new datasets and information sources, including social media.

Interestingly, social media is supposed to be a relevant source of information, what would that be based on?

There is a paragraph on real-time data collection:

In a smart factory, machines, devices and systems are interconnected and can communicate with one another, enabling real-time data collection, analysis and decision-making. What can we learn from other industries to become more effective and efficient in our supervision?

Will soon every human be compulsorily connected in a ‘smart’ system, collecting real-time data on that human, so that the government can have that data analysed for decision-making purposes?

The speech ends with the day-to-day problems of a financial supervisor in an uncertain world, also made uncertain because big-tech was not intervened in time.

Fortunately, she quotes Edward O. Wilson:

“The real problem of humanity is the following: We have Palaeolithic emotions, medieval institutions and godlike technology.”

who might not be right about ‘godlike technology’, but who is right about palaeolithic emotions and medieval institutions.

Notes:

[1] Peering through the hype – assessing suptech tools’ transition from experimentation to supervision, 14 June 2024.
[2] Elizabeth McCaul, The future of European banking supervision – connecting people and technology, 18 September 2024.