The EBA identifies support needed for big data and advanced analytics rollout

The European Banking Authority (EBA) has recognized data management, technological infrastructure, organization, and governance and analytics methodology as the four key areas for big data and advanced analytics rollout.

In its new report on trends around big data and advanced analytics in banking, the regulator outlined the core considerations needed for the development, implementation and adoption of the technology.

The EBA stated it is becoming increasingly important for competence, with training and development, and close engagement between players could be the starting point of this.

It found that all functions within institutions can improve existing services efficiency and productivity. In general, most institutions use simple algorithms which leverage their core banking data, but advanced analytics could be evolved in the coming years.

Data management, technological infrastructure, analytics methodology, organisation and governance are the main areas to support the distribution of advanced analytics.

In addition to this, the EBA believes “elements of trust” need to be addressed. These include ethics, explainability and interpretability, fairness and avoidance of bias, traceability and auditability, data protection, data quality, security and consumer protection.

More work is needed to ensure solutions respect and incorporate these “elements of trust”, the regulator stated. An example of this is stricter requirements on the explainability aspect when there is a potential impact on business continuity or potential harm to a customer.

The aim of the assessment was to share knowledge amongst stakeholders and ensure regulators and supervisors are informed on the developments.

Moving forward, the EBA is continuing to monitor the developments in tandem with new technology adoption within financial services.

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