Vision, mission and objectives

Our vision

Effective, firm and forward-looking. For a stable and fair financial system that you can trust.

Our mission

BaFin is committed to ensuring the stability, resilience and integrity of the financial system. Hence we contribute to a strong and competitive financial sector in Germany while actively protecting the interests of consumers.

We act boldly and swiftly, focussing on the major risks. The information we share is clear and understandable. As a modern, independent institution, we make our objectives and actions transparent. We anticipate new developments such as the impact of geopolitical shifts and environmental risks as soon as they emerge. The same goes for the opportunities and risks arising from innovative technologies, products and business models.

We have a strong international voice advocating robust supervision and clear, practical and proportionate financial market regulation in Europe.

Our objectives

BaFin is committed to ensuring the stability, resilience and integrity of the financial system. Hence we contribute to a strong and competitive financial sector in Germany while actively protecting the interests of consumers.

We act boldly and swiftly, focussing on the major risks. The information we share is clear and understandable. As a modern, independent institution, we make our objectives and actions transparent. We anticipate new developments such as the impact of geopolitical shifts and environmental risks as soon as they emerge. The same goes for the opportunities and risks arising from innovative technologies, products and business models.

We have a strong international voice advocating robust supervision and clear, practical and proportionate financial market regulation in Europe.

1. We promote financial stability

We proactively protect the financial system as a whole and make sure that supervised entities have effective risk management.

• We monitor the relevant risks of supervised entities, detect and analyse important changes, and react quickly and consistently. We work to ensure that supervised entities have an effective risk management so that they remain stable in the face of volatility or shocks. We address vulnerabilities immediately with appropriate supervisory measures – if necessary, with capital add-ons and liquidity surcharges or business restrictions.
• We also utilise our macroprudential instruments quickly and consistently as required, always on the basis of a systematic analysis of the relevant information and data.
• We ensure that supervised entities have an effective system of governance and risk management.
• Our supervisory practice increasingly focuses on the viability of business models – particularly in connection with technological, regulatory and social changes.
• We pay special attention to geopolitical risks.
• As Germany’s national resolution authority, we draw up individual resolution plans and work on their implementation – including in the context of cross-border activities – in order to prepare in the best way possible for bank failures and to avert damage to the financial system.

2. We work to strengthen the operational resilience of financial market participants

We push supervised entities and their key service providers to strengthen their operational resilience. We keep a close eye on IT risks and outsourcing arrangements. We understand critical dependencies, including from a geopolitical perspective, and push to minimise them wherever possible.

• We significantly increase the number of inspections and make them more modular and risk-oriented by building the necessary expertise and investing greater resources.
• We monitor the cyber threat level for supervised entities and liaise directly with companies in the financial sector and partner authorities regarding acute threats to resilience.
• We take preventive measures to increase operational resilience against cyber and IT risks, analysing the vulnerability of supervised entities. We refine our tools for limiting the systemic impact of cyber crises so that we can react quickly and effectively if they occur, all while working closely with our partner authorities to achieve our objectives.
• We review relevant outsourcing arrangements and ensure that supervised entities appropriately manage their service providers and the associated risks. In this context, we keep an eye on interrelationships and concentration risks across business divisions, sectors and national borders. We make sure that multi-client service providers meet their obligations and act as reliable partners for the financial industry.

3. We identify problem companies early and take swift action

We analyse the supervised entities and identify problem companies at an early stage. We take consistent supervisory measures to ensure that these companies rectify any shortcomings.

• We expand our capacity to identify problem companies as early as possible by systematically integrating the information available to us.
• We enhance our early detection capacities by continuously analysing internal and external data sources, including market information and the media. We strengthen our company-specific qualitative and quantitative risk classification and tailor our action to the respective risks.
• We closely monitor problem companies and take suitable measures at an early stage. When appropriate, we take action to restrict a company’s business activities until the shortcomings are remedied. We apply the knowledge gained here across the board in ongoing supervision and take it into account when developing regulation.

4. We strengthen the prevention of money laundering and terrorist financing in the financial sector

Our supervision makes financial sector companies less vulnerable to money laundering and terrorist financing.

• We intensify our supervision of the controls and systems for preventing money laundering and terrorist financing. We conduct more inspections and allocate greater resources. If we identify shortcomings, we take prompt and consistent action to rectify them. For this purpose, we also systematically develop our own data-driven supervision with a special focus on the risks in payment transactions and the crypto market in order to make it more difficult to misuse them.
• We promote dialogue among all relevant players in the public and private sectors who have a role in combating and preventing money laundering and terrorist financing.
• We advocate effective regulation and supervision in the fight against money laundering and terrorist financing both in Germany and internationally. One of our key objectives is to provide the best possible support to the European Anti-Money Laundering Authority (AMLA) as it commences its supervisory work. We are actively involved in the regulatory projects laying out the details of the EU's anti-money laundering package and are pushing for a risk-based approach. We advocate a secure digital method of identifying natural persons and the interlinking of account information access systems within the European Union.

5. We promote the transparency and value for money of financial products and protect the collective interests of consumers

We identify material risks for consumers in the financial sector and take action to protect their collective interests. Among other things, we check whether the financial services offered are exempt from authorisation, subject to notification, subject to authorisation, prohibited or misleading.

• We analyse market data and product characteristics in order to define risk indicators, recognise trends in consumer behaviour and identify problem areas early. One of our priorities is monitoring how consumers’ investment behaviour is influenced by social media and new financial technologies.
• Based on our market screening, we take decisive action against dubious and unauthorised providers and address any shortcomings we identify. We warn consumers promptly and clearly about unauthorised services, thus protecting them from financial loss. We take an especially close look at digital products and services.
• We examine financial products and their marketing for misleading information and focus on the conduct of business. Financial products must offer value for money. We take appropriate measures across all segments of the financial market.
• We support financial education by providing relevant, comprehensible information. In this context, we also educate consumers on environmental risks to which they might be exposed, especially natural disasters.
• We process complaints about financial service providers quickly and professionally.

6. We ensure market transparency and market integrity

We strengthen market integrity and make sure that market participants comply with market transparency requirements. In the case of publicly traded companies, financial reporting enforcement plays a key role. We set rules for the execution and publication of market transactions.

• We reinforce the integrity of the German financial centre by consistently investigating companies that violate authorisation requirements. We work closely with law enforcement agencies to prosecute unauthorised business activities.
• We step up our efforts to combat unfair market practices and market manipulation, making use of our full range of supervisory tools. We intensify our market screening and trading data analysis.
• To safeguard the integrity of the financial market, we work closely with the trading surveillance units of the stock exchanges and national law enforcement agencies to gather information and prosecute illegal business activities. At European level, we cooperate with the competent national authorities and with the European Securities and Markets Authority (ESMA). We benefit from the experience of our international partners and work with them to take even more effective action against unauthorised cross-border business activities.
• We set risk-based priorities in financial reporting enforcement and publish our expectations. One of our priorities is monitoring compliance with the sustainability reporting requirements for publicly traded companies.
• We streamline and optimise the prospectus review process in order to reinforce Germany’s attractiveness as a financial centre.

7. We embed relevant sustainability issues in our supervision

We make sure that supervised entities take sustainability risks into account in their business activities, fulfil the applicable requirements with regard to transparency and distribution, and provide meaningful information on the sustainability impacts of their financial products.

• In national, European and international bodies, we advocate risk-oriented, practicable and consistent regulation that sets out clear, principles-based requirements.
• The handling of sustainability-driven financial risks is an integral part of our prudential, conduct and market supervision. In addition to transition risks, we focus in particular on the physical risks of climate change. We make sure that supervised entities sufficiently integrate these risks into their risk management systems and have analysed the potential impact on their business models.
• We monitor compliance with disclosure requirements and the requirements for sustainable financial products. By enforcing transparency requirements, we enable investors to make independent investment decisions in line with their sustainability preferences. We take consistent supervisory action against any misleading marketing of sustainable products.

8. We take a positive stance on the use of innovative technologies and business models to benefit consumers

To ensure fair competition, we set appropriate requirements for all market participants and maintain a constructive dialogue with financial companies on innovative financial technologies and business models.

• We analyse the potential and risks arising from new technologies for supervised entities, consumers and financial stability. To this end, we ensure that our knowledge of new technologies and business models is always up to date, and we constantly review how they are being applied.
• We step up our dialogue with market participants while focusing on the special information needs of those just entering the market. We communicate our supervisory assessment of innovative technologies and business models in a manner appropriate for the target group. We speed up authorisation processes and make the application status more transparent.

9. We take a more risk-based approach and advocate for less complexity and greater proportionality

At the national, European and global levels, we proactively advocate more risk-oriented supervision and reducing the complexity and implementation burden of regulation without compromising on financial stability.

• Proportionality and risk orientation are firmly anchored in our supervisory practice. If smaller companies are not exposed to greater risks, we reduce their bureaucratic burden. We use our discretion in favour of proportionality. We advocate a small banks regime.
• We contribute our expertise early in the legislative process to promote effective and efficient regulation and to submit proposals for reducing complexity. In this context, we take into account the diversified structure of the German financial market. We represent our positions clearly and are recognised as a strong voice in Europe and on the global stage.
• We speed up our supervisory processes by reducing their complexity, setting transparent deadlines that are as short as possible and simplifying our communication with external stakeholders.

10. We are fit for the future and strengthen our position as an attractive employer

We can only succeed thanks to the expertise and diversity of our staff. As a learning organisation, we are open to change. We continuously develop our structures, processes and working methods so that we are able to fulfil our tasks competently, quickly and digitally. We offer a sense of purpose in an attractive and stimulating environment for qualified professionals.

• We continuously develop our staff’s expertise by identifying individual training needs and development potential. Employee development is also supported by a general policy of encouraging staff to try out different tasks or functions beyond the boundaries of their current organisational unit.
• We offer an open working environment that is free of prejudice and characterised by diversity, appreciation and equal opportunities. We promote a healthy work-life balance.
• We work together and learn from each other in cross-functional and interdisciplinary teams. We maintain an open dialogue and consider different points of view in our collaboration. We use feedback to continuously improve, and we encourage a constructive discussion of successes and failures.
• We constantly scrutinise and optimise our processes, aiming to increase their speed and quality and thus to fulfil our supervisory mandate in the best way possible.
• We increasingly harness new technologies to expand our data-driven supervision. We steadily modernise our IT infrastructure, making it future-proof and resilient. We take steps to significantly improve our centralised data collection platform and eliminate all paper processes where legally possible. We ensure compatibility with the systems of our supervisory partners.
• We are approachable, we communicate clearly, and our information is easy to find. Our decision-making processes produce convincing results transparently and quickly.