Austrian Regulator Lays Out 2026 Supervision Priorities Amid Global & Digital Risks

Key Takeaways

• Resilience Remains Central: The Austrian Financial Market Authority will continue to prioritize financial stability amid rising geopolitical, credit, and digital risks.
• Efficiency and De-Bureaucratization: The FMA aims to simplify supervision and reduce reporting burdens, with EU efforts pointing to potential cost reductions of around 25 percent.
• Digital Supervision Push: A new “360-degree” platform will support more risk-based supervision, faster authorizations, and streamlined inspections.
• Sanctions Supervision Shift: From January 2026, the FMA will oversee financial sanctions compliance, creating a single supervisory hub for Austria.
• Credit and Real Estate Risks: Supervisors will focus on reducing non-performing loans, particularly in commercial real estate, to protect credit flow to the economy.

Deep Dive

Austria’s financial sector is entering 2026 on solid footing, according to the country’s financial watchdog, but the risks facing banks, insurers, and markets are becoming more complex and more global. In presenting its Goals and Priorities for Supervision for 2026, the Austrian Financial Market Authority said it will sharpen its focus on resilience and stability while pushing to streamline supervision and cut unnecessary bureaucracy.

Banks and insurance companies remain well capitalized, giving them capacity to support economic recovery and invest in future-oriented initiatives. At the same time, the FMA warned that pressures on financial stability have not eased. Rising non-performing loans, lingering commercial real estate risks, geopolitical tensions, sanctions compliance, crypto markets, and the growing use of artificial intelligence are all shaping the supervisory agenda for the year ahead.

“Our objective remains constant: a strong and stable financial sector for Austrian enterprises and households,” said FMA Executive Director Mariana Kühnel, stressing that priorities must be continuously reassessed as risks evolve. In a volatile environment, she noted, supervision must remain flexible, with resources reallocated and new supervisory areas expanded where necessary.

Helmut Ettl, Executive Director of the FMA, echoed that message, underscoring that resilience and stability remain non-negotiable. He said improving efficiency and reducing costs is essential if supervision is to keep pace with risks linked to geopolitics and digitalization.

A central pillar of the FMA’s 2026 strategy is reducing bureaucracy while increasing supervisory efficiency. Across Europe, regulators are reassessing reporting and supervisory requirements to eliminate duplication and low-value data collection. An EU banking task force chaired by Ettl has identified the potential for cutting reporting costs by around 25 percent, a goal the FMA intends to support at both the European and national levels.

Internally, the authority is accelerating its digital transformation. The FMA’s “360-degree” supervisory platform is designed to harmonise on-site inspections, streamline reporting, and speed up authorization processes. The regulator says this will allow supervision to become more risk-based while freeing up internal resources, a shift that should also reduce the burden on supervised firms.

Global developments remain a major source of concern. The FMA highlighted the risk of asset bubbles, particularly in parts of the technology sector, and the growth of financial activity outside regulated markets, including private credit and stablecoins. Geopolitical tensions, from trade measures to armed conflicts, also continue to weigh on financial stability. As a small, open, and export-oriented economy, Austria is especially exposed to these global shocks.

The intersection of political and financial risk is particularly evident in the area of sanctions. From 1 January 2026, the FMA will assume responsibility for supervising financial sanctions compliance, becoming a “one-stop shop” for Austria’s role as a clean financial centre. The authority said its existing supervisory work has already strengthened Austria’s international reputation, and that combining inspections for anti-money laundering and financial sanctions will create efficiency gains of around 25 percent for supervised entities.

On the domestic front, Austrian banks and insurers have used strong recent profits to bolster their capital buffers. However, the FMA cautioned that commercial real estate financing remains a concern. Non-performing loans continue to rise, even if the pace of increase has slowed. Ettl said the regulator hopes the sector is nearing the worst of this cycle, but supervision in 2026 will prioritize the swift reduction of non-performing loans to ensure that lending to the broader economy is not constrained.

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