The European Banking Authority announced its full 2026 Work Programme, marking a paradigm shift for EU financial regulation in the coming year. This document contains 269 deliverables: 143 of which have legal or voluntarily imposed timing requirements and are expected to create a new paradigm for banking activities within the EU framework because of its focus on efficiency and new technology without constraining the single rule book for EU banks.
Three strategic priorities shape European banking regulation
The EBA’s 2026 strategic priorities revolve around three major themes that will shape its future as the supervisor of European banking.
1) The primary task at hand is to establish a rule book that helps to facilitate a resilient and sustainable single market for all member nations. This would implement norms uniformly while addressing the requirements of various banking bodies.
2) The second priority is to perform risk analysis with advanced approaches and information to improve the effectiveness of analysis, supervision, and oversight activities. This approach will also facilitate quick risk detection by supervisors and timely response activities to deal with risks.
3) A third priority is to focus innovation to improve technology capabilities for all stakeholders because digital change is crucial to sustaining any kind of edge for competitiveness around the world.
“The EBA’s work will aim at strengthening the simplicity and efficiency of the regulatory and supervisory framework for banks and financial entities in the EU, in close cooperation with the relevant EU and non-EU stakeholders.”
Digital supervision significantly enhances EBA’s supervisory tasks
2026 is also a crucial year for the EBA in its expansion of supervisory powers because this is when the Authority assumes direct supervisory powers for several significant EU regulations, namely Digital Operational Resilience Act (DORA) supervision of critical third-party providers, supervision of crypto-asset issuers for the Markets in Crypto-Assets (MiCA) Regulation, and validation of initial margin models for supervision under the European Market Infrastructure Regulation (EMIR).
Nevertheless, its role is to be succeeded by two new bodies: by 2024, its supervisory powers will shift to the Single Market Oversight (SMO) authority responsible for prudential supervision, and to another new authority called the Electronic Oversight Authority (EOA). Additionally, its role will also go to the EBA itself: it will transfer its anti-money laundering and terrorist financing role to “the newly established Anti-Money Laundering Authority (AMLA).”
The execution of DORA constitutes a paradigm shift for financial institutions within Europe to carry out operational resilience, requiring full-scale risk management strategies for digital business activities to take place. Financial banks are required to demonstrate strong cybersecurity, business continuity planning, and third-party risk management capabilities to meet such regulatory requirements for operating license maintenance.
Efficiency measures aim for a 25% cut in reporting obligations
The EBA has launched a wide-ranging assessment of the framework for regulation and supervision, and this exercise has culminated in 21 specific recommendations intended to enhance efficiency while maintaining resilience for the financial system. This ambitious endeavor is intended to deliver at least 25% of reduced reporting costs for all financial institutions by removing overlapping requirements and optimizing reporting processes for several jurisdictions and supervisory entities combined.
Efficiency-driven efforts include the development of a common data dictionary to facilitate integrated reporting for the banking sector. This is achieved through cooperation between EBA and national supervisory authorities to offer help to reduce overlaps among requirements and make use of reporting templates. This approach helps to avoid efficiency challenges affecting effectiveness or causing supervision shortcomings that may result in instability of the whole economy.
This wide-ranging program aims to manage new risks associated with technology while making improvements to classic supervision processes, thus ensuring a nimble and efficient regulatory environment. EU banks are clearly faced with this major transition moment to emerge successfully by perfectly amalgamating strong technology infrastructure with the basic requirements of compliance under a highly technology-driven finance sector.
