Supervisory Report 2024: Implications for SIs and LSIs

Navigating the path ahead – part 3/3

In the final part of our Risk & Regulatory Priorities series, we delve into the key themes emerging from the supervisory priorities for 2025–2027 and their implications for Significant and Less Significant Institutions (SIs and LSIs). Once again, we draw practical conclusions and provide implementation advice tailored to institutions of varying sizes and complexities.

For background context, we refer to Part 1 and Part 2 of the series: SREP Results: Risk & Regulatory Priorities and practical Implications for Financial Institutions - BDO and Less Significant Institutions (LSI) Supervisory Report 2024 - BDO.

The ECB’s Supervisory Priorities are among the most significant publications shaping the strategic direction of risk management, reflecting its medium-term supervisory strategy for the next three years. While credit and operational risks — particularly cyber resilience — remain central, there is continued emphasis on strengthening infrastructure and transparency around climate and environmental risk management. Internal governance, with a focus on the effectiveness of management bodies, and addressing long-standing deficiencies in risk data aggregation and reporting, also feature prominently on the agenda.

A notable addition to this year’s priorities is the heightened focus on integrating geopolitical risks into risk management frameworks amidst the heightened uncertainty and evolving dynamics on the geopolitical front. In this regard, Financial institutions are expected to adapt swiftly to the evolving geopolitical dynamics to enhance resilience from a supervisory lens.

During the next weeks, we will share our perspective on key regulatory expectations, best practices, and insights from industry experts both within and beyond the financial services sector. We will also explore practical implications drawn from recent projects on managing geopolitical risks in financial institutions.

Our objective: to equip you with actionable insights to navigate an evolving regulatory landscape, where effective risk management remains a key strategic enabler.

Navigating the path ahead – part 3/3