Decision-Making Support for Supervisory Control of Non-Banking Financial Institutions

Abstract

With the change in the regulatory landscape in the financial sector, the organization of the activities of nonbanking financial institutions (NBFI) is making more and more demands on the part of state regulatory authorities. To increase the effectiveness of supervision of NBFIs, regulatory bodies use systems that automate the supervisory activities, and, in particular, decision support systems. This paper presents a decision support system to plan supervisory activities over NBFIs in accordance with the principle of risk-based supervision, in which resources are concentrated on NBFIs with the maximum amount of risk or scope of activity. The developed system tracks and prevents violations, adjusts the correctness of actions in relation to NBFIs. In addition, the system plans supervisory activities, changes the supervision regimes for NBFIs and controls the timing. The application of the developed system increases the effectiveness of the regulatory bodies in terms of control and supervision of both individual NBFIs and the financial market as a whole.