ECB completes procurement to pioneer AI in package of ‘supervisory tech’ innovation

The European Central Bank (ECB) has completed a procurement for so called supervisory tech as it pioneers emerging technologies, including artificial intelligence.

Supervisory authorities such as the ECB – which oversees banks across Europe through the Single Supervisory Mechanism (SSM) and, in cooperation with national supervisors, is responsible for ensuring banking supervision is effective and consistent – have increasingly been turning to the possibilities of fintech-related solutions to improve their work, known as SupTech.

Global Government Forum’s sister title Global Government Fintech revealed 15 months ago that the ECB was looking to significantly extend its capabilities in developing fields such as AI and machine-learning by procuring outside expertise via a tender process with the overall title of ‘SupTech Digital Transformation Delivery and the Exploration, Prototyping, Deployment and Training of Emerging Technologies’. After a competitive procedure that caught the eye of some of the world’s biggest tech companies, the contract award notice has now been published.

Work is split into two lots: the first is for ‘SupTech digital transformation delivery including business process re-engineering and the deployment of emerging technologies’; and the second is for ‘brokerage of emerging technologies exploration, prototyping and training services for banking supervision and central banking’.

Lot one is the largest part, valued at €30m (US$31.6m) per year for an initial four years with up to three 12-month renewals, while lot two is valued at €2.5m (US$2.6m) per year with the same stated contract length.

Five contractors have been appointed in lot one: d-fine; IBM (Deutschland); NTT DATA Deutschland/NTT DATA Belgique; Oliver Wyman and Senacor FCS. Lot two has been 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 planning to allocate work via what are called ‘call-offs’. For example, a call-off within lot one could see all five parties submitting (new) bids should they be interested to bid.

External work could also be divvied up among sub-contractors (all of which are also named on the ECB’s award notice, underneath the relevant contractor). Sub-contractors listed include Quantexa Belgium, Regnology (Germany) and ActiveViam (UK).

Using tech to ‘get the most from data’

“This tender shows the importance the European Central Bank is paying to cutting-edge supervisory and regulatory technologies, including artificial intelligence and machine learning. It is our goal for ECB banking supervision to be at the forefront of these developments,” an ECB spokesperson told Global Government Fintech in our report on the procurement getting underway.

FURTHER READING

‘SupTech use rockets but adoption barriers remain: survey’ – GGFt’s 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’ – GGFt’s scoop (18 January 2021) on the launch of the process