The Finnish Financial Supervisory Authority’s (FIN-FSA) will focus on the soundness of supervised entities’ governance, and treat uncertainties in the operating environment as supervisory priorities for 2025, the authority has announced. This is consistent with priorities that were announced for 2024.
FIN-FSA said that the geopolitical situation, changes in the operating environment, and increasing regulation “underline the need to monitor risk management of the supervised entities.”
For 2025, the authority’s supervisory priorities will include:
- operational and financial preparedness;
- IT and cyber risks;
- ESG risks;
- risks related to outsourcing; and
- risk around the increasing use of AI.
The regulatory changes and emphases in supervision will focus on:
- the soundness of corporate governance;
- client and investor protection; and
- sustainability reporting.
AI and DORA
The priorities will also be affected by new regulations and their enforcement, such as the Artificial Intelligence Regulation, and the Digital Operational Resilience Act (DORA). The supervision of sustainability reporting will also present new areas to be supervised.
Another new responsibility will be the supervision of new authorized supervised entities such as crypto-asset providers and the pension provider KEVA.
“We have promoted predictability by communicating our supervisory plans so that our supervised entities know what we consider, as supervisor, to be important at any given time.”
Tero Kurenmaa, Director General, FIN-FSA
However, last year priorities were “implemented quite comprehensively” FIN-FSA said. Some were cancelled after changes in a supervised entity’s circumstances or the reallocation of inspection resources. This time, FIN-FSA will be more flexible, Tero Kurenmaa, Director General of the FIN-FSA said. “We will continue to be ready to review our supervisory priorities flexibly throughout the year.”
Assessment and inspection plan 2025
During the year, FIN-FSA will perform a number of thematic assessments (TA) and supervized entity-specific inspections in four areas: banking, insurance, capital markets, and digitalization and anti money laundering. The authority says that the findings of the TA might lead to further investigations or other supervisory measures.
| TA: Banking supervision | TA: Insurance supervision |
|---|---|
| Credit risk – Identification and provisions for increased credit risk (LSI banks) – Lending and supervision (LSI banks) | Sound governance – Investment expenses of employee pension funds – Asset and liability valuation processes |
| Sound governance – Lists of related parties and lending (LSI banks) | Underwriting risk – Tax component of capital adequacy calculation (LAC DT) |
| Conduct – De-risking of banks – Assessment of creditworthiness | Conduct of business – Automated decision-making |
| Risks to customer – Franchising of agent activities | |
| Supervised entity-specific inspections: – Sound governance – Credit risk – Internal models – Market risk | Supervised entity-specific inspections: – Sound governance – Market risk – Underwriting risk |
| TA: Capital markets | TA: Digitalisation and AML |
|---|---|
| Conduct in the market – Marketing of crypto-asset services – Decision-maker reporting | Sanctions – Sanctions monitoring |
| Sound governance – Compliance and internal control | Operational risk – Cyber resilience stress test – Usage of AI in the financial sector |
| Investor information – Application of IFRS standards – Application of ESRS standards | |
| Supervised entity-specific inspections: – Sound governance – Investor information – Operational risk | Supervised entity-specific inspections: – Operational risk – Preventing money laundering and terrorist financing – Sanctions |
Releasing key finings
Another new development for 2025 will be the release of summaries of inspection reports, which FIN-FSA will publish on its website in order to be a proactive and predictable supervisor. This will start to happen during the first part of the year.
“We have promoted predictability by communicating our supervisory plans so that our supervised entities know what we consider, as supervisor, to be important at any given time,” said Kurenmaa.
“In the future, we will enhance our predictability by reporting on our website key findings, also for inspections of individual supervised entities, thereby providing guidance to all supervised entities.”
