The Austrian financial sector enters the new year well equipped: banks and insurance companies are well capitalised and are able to finance the economic upturn and to invest in the issues of the future. However, current and medium-term challenges have not diminished, and encompass risks for global financial stability increasing levels of non-performing loans, through to new structural issues arising from the geopolitical situation and digitalisation ranging from crypto markets, financial sanctions through to artificial intelligence.
In the year ahead, the Austrian Financial Market Authority (FMA) will continue to focus on strengthening the resilience and stability of financial market participants. The FMA’s particular focus will be on the risk-based increasing of efficiency of supervisory activities. Simplification and debureaucratisation are essential for the FMA in the years ahead for cutting costs, both for supervised entities as well as in the authority itself, and for freeing up resources needed to address new tasks and risks.
“Our objective remains constant: a strong and stable financial sector for Austrian enterprises and households,” remarked FMA Executive Director Mariana Kühnel at the presentation of the FMA’s objectives and priorities for supervision for 2026. “In an uncertain and rapidly changing environment, the need to re-evaluate this objective always exists: priorities need to be adapted, resources reallocated, new supervisory areas developed and extended as necessary.”
“Resilience and stability are non-negotiable: there is no alternative option to a strong and stable financial market and a strong supervisory authority in Austria”, added FMA Executive Director Helmut Ettl. “Increased efficiency and cutting costs allows us to focus supervision on the new tasks and risks arising from the geopolitical situation and digitalisation.”
Increasing efficiency and reducing bureaucracy
“Reducing bureaucracy, simplification, increasing efficiency – these criteria are being used in Europe to comb through regulation and supervision,” Kühnel stated. One priority is on data reporting requirements: European and national supervisory authorities are actively seeking to avoid duplicate or less useful data collection exercises. A European Banking Authority task force chaired by Helmut Ettl has identified a potential 25% reduction in reporting costs.
By simplifying and harmonising its internal processes and procedures, with help from digital tools the FMA will be able to work more efficiently and in a more risk-based manner. The “360 degree” platform is at the heart of the FMA’s digital transformation to harmonise on-site inspections, streamline reports, and speed up authorisations. In turn, it will free up internal resources, making a visible difference for supervised entities.
Global and national risks
Global risks for financial stability include the risk of asset bubbles (e.g. in the technology sector), developments outside of regulated markets (private credit, stablecoins), as well as geopolitical developments ranging from tariffs through to military conflicts. “As small, open, and export-oriented real economy, Austria is particularly exposed towards global risks,” Kühnel remarked. “That is also the case, where political and economic risks intersect one another, such as regarding financial sanctions,” Ettl added.
In taking over financial sanctions supervision from 1 January 2026, the FMA becomes the “One Stop Shop” for Austria as a clean financial centre. The FMA’s successful work in recent years has already borne fruits in recent years, and has benefited the financial centre’s international reputation. Combined FMA inspections regarding money laundering and financial sanctions also create a synergy of around 25% for supervised entities.
Austrian banks and insurance companies have used their strong profits in recent years to further strengthen their capital base. However, there is no all clear regarding commercial real estate financing yet, since levels of non-performing loans are still increasing, albeit with slowing momentum. “We hope to soon be over the worst,” remarked Ettl. The FMA will focus on the swift reduction of non-performing loans, to ensure that the granting of credit to the healthy economy does not suffer.
The FMA’s medium-term strategy, and a full objectives and priorities for supervision for 2026 are presented in the latest edition of “Facts and Figures, Trends and Strategies” on the FMA website.
Journalists may address further enquiries to
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43/(1)249/59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]