Three years ago we adopted a five-year strategy (to cover the period 2022-26). It was an important moment in our recent history, marking a new direction for the organisation recognising that, following the successful efforts over the previous decade to address weaknesses in the financial system, there was now a need to pivot towards the emerging challenges posed by rapid and complex change, particularly in technology. The strategy had four interconnected themes (future-focused, open and engaged, transforming and safeguarding) which represented a repositioning to ensure our direction and ambition were responsive and forward-looking.
We took the opportunity this year to review our progress. Against the evolving and changing global economic backdrop and the economic growth here in Ireland, we have concluded that the strategic direction we set in September 2021 continues to be appropriate. Our refreshed strategy (you can read it here (PDF 2.57MB)) confirms our commitment to the four themes but has been updated and extended it to focus on some of the actions we will take to achieve our aims over the coming three years (2025-27).
Transforming how we regulate and supervise the financial system
One of the significant changes we are making is to the way we regulate and supervise the financial system. These are internal changes (which will come into effect in January) but they won’t be invisible to the firms we supervise. At their core, the changes are about the integration of all elements of our regulatory mandate (consumer protection, integrity, soundness, financial stability) so that firms hear one consistent message from us. You can find more information here. I will be speaking in more detail about these changes on Monday at our Financial Systems Conference.
Transforming our Fitness and Probity Regime
Part of the transformation of our regulation and supervision involves changes to our Fitness and Probity regime. We published a
review (PDF 1.03MB) of the regime last July which concluded that, although it was broadly in line with that of peer regulators across a number of dimensions (such as standards, statistics on outcomes and timelines), there was also a need for targeted improvements in three areas: clarity of supervisory expectations, internal governance of the process, and the fairness, efficiency and transparency of the process. I accepted the findings of the report and agreed to all its recommendations. We are on track to implement these by the end of this year.Transforming our engagement
The Financial System Conference itself is a manifestation of one the strategy’s important themes, that we want to be more open and engaged (in order to better understand what’s happening in the economy and financial system, but also to be better understood by all of our stakeholders, whether regulated firms or members of the community). Apart from the Conference, senior colleagues and I continue to travel from Dublin to other parts of the country so that we can hear directly from businesses (and others) as to how the economy and financial system is working for them. I have found these visits very informative, as well as enjoyable. (Our Open & Engaged Charter sets out more information about what we’re doing.)
Innovation Sandbox
We have enhanced our innovation facilities – with the establishment of a new innovation sandbox programme – enabling us to anticipate and to support innovation in the financial sector, deepen our understanding of innovation, better inform our regulatory approach, better explain to innovative firms what being regulated entails and embed a regulatory culture in fledgling and fast growing firms.
Conclusion
Last week I spoke at the Singapore Fintech Festival. It was also an opportunity for me to see the sheer breadth and depth of the innovation that is happening in financial systems across the globe (especially in Asia). I don’t think I needed to be persuaded that the financial system is changing rapidly but what I saw in Singapore was extremely clear and persuasive: change isn’t just coming; in some parts of the world it is already here. Technology is driving significant change, and new entrants will continue to innovate, disrupt and challenge existing market participants to progress technology transformation as a strategic imperative. It also confirms that the pivot we made to our strategy – and in particular to become more future-focused – was the right one.
Gabriel Makhlouf
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