Inspection activities

The role of the Financial Supervisory Authority (FIN-FSA) is to supervise the activities of financial market participants. The objective of the FIN-FSA’s activities is to ensure the balanced operation of credit, insurance and pension institutions and other regulated supervised entities, as required by the stability of financial markets, and to safeguard the interests of the insured and maintain public confidence in the functioning of financial markets.

The objective of risk-based supervision is to efficiently target supervisory resources at the most significant financial sector risks, taking into account the FIN-FSA’s assigned role. Supervision is risk-based when supervisory measures are scaled to be proportionate to the assessed risks. As a result, supervisory intensity and supervisory measures vary between different risk areas, supervised groups and supervised entities. The direction of supervision is also influenced by changes in the operating environment, regulatory developments and supervisory findings.

The FIN-FSA’s objective is to be a proactive and predictable supervisor. Each year, we define the focus areas of supervision, which guide supervisory measures for different risk areas and supervisory themes. The focus areas of supervision also guide our inspection and thematic review plan, which we have published since 2023. By communicating our supervision plans, we aim to bring proactiveness to the field of supervision and to state what the supervisor considers to be important at any given time. We also aim to be flexible and ready to review the focus areas of our supervision as necessary throughout the year.

The FIN-FSA supervises and inspects the banking, insurance and capital markets sectors. With regard to large banks, the FIN-FSA supervises and inspects activities related to anti-money laundering and sanctions as well as customer and investor protection, while the European Central Bank (ECB) supervises and inspects the solvency of large banks. The large banks in Finland are Nordea Bank Plc, OP Financial Group, Municipal Finance Plc and the Finnish branch of Danske Bank.

Inspections are one of the FIN-FSA’s key supervisory tools and are widely targeted at different sectors and their risk areas. An inspection never assesses the operators/supervised entities as a whole; the focus is on a specific risk area.

An inspection assesses in detail an individual inspection target and its specific risk area. The purpose is to ensure that the financial sector entity complies with the relevant regulations and manages the risks it takes in the risk area selected for the inspection.

An inspection is carried out according to a pre-approved plan and its findings are based on a specific period of time. The members of the inspection team are impartial and objective and have no conflicts of interest that could affect the conduct of the inspection.

An inspection report, which is a deviation report, is prepared for the inspection. The inspection findings are deviations from the regulatory criteria applicable in the inspection. The inspection report is a description of any deviations, deficiencies or omissions found during the inspection.

The inspection report uses a four-step rating system to assess the significance of the findings (see below table in menu item 7. Assessment of the significance of inspection findings).

The assessment of significance takes into account the financial and qualitative significance of the deficiency (risks, earnings, own funds, extent, management credibility), the magnitude of the deficiency (deviation from criteria), the duration, degree of intent and negligence, possible earlier intervention in the matter, and general and customer interest.

Summaries of inspections carried out on the FIN-FSA’s own initiative are public. The publication of the summaries aligns with the FIN-FSA’s strategic objective of being a proactive, predictable and consistent supervisor as well as the goal of increasing the effectiveness of and trust in the FIN-FSA’s work by communicating about its activities. The summary of an inspection is made available on the FIN-FSA’s website once the inspection is completed.

Inspections carried out on the FIN-FSA’s own initiative are directed at all supervised entities in the banking, insurance and capital markets sectors, with the exception of inspections directed at the solvency of large banks, for which the ECB is responsible.

Assessment of the significance of findings

Findings are classified into four classes based on their significance. Indicative differences between the significance classes of inspection findings are described above. In addition to these factors, other factors may also be taken into account where appropriate. The final assessment is always based on an overall assessment.

Assessment of the overall significance of findings

In determining the overall significance of findings, the significance of individual findings, the number of findings and the overall picture given by the inspection findings of the object of the inspection in the subject area inspected are taken into account. The final assessment is always based on an overall assessment.

The FIN-FSA monitors that the supervised entities correct the deficiencies identified during inspections.  The supervised entity must inform the FIN-FSA of the corrective measures it will take. The FIN-FSA assesses the scope, thoroughness, substance and timing of the corrective measures.

An inspection may reveal findings that require consideration of sanctions. There is no mention of a possible consideration of sanctions in the inspection report or in the inspection summary. If the FIN-FSA suspects a crime, it will submit a request for investigation to the Police.