Financial stability initiative: Bank of Finland/Fin-FSA’s credit register and cloud-based analytics platform

When it comes to assessing threats to financial stability, Finland’s regulators believe there is no such thing as “too much information”.

Last spring, the Finnish tax administration went live with its positive credit register – a comprehensive database that enables the supervisory authorities to monitor levels of household indebtedness at an unprecedentedly granular level. The Bank of Finland was actively involved in designing the register and teamed up with the Finnish Financial Supervisory Authority (Fin-FSA) to develop a new cloud-based platform to analyse the register’s data in real time. The aim is to monitor any threats to financial stability from heightened levels of indebtedness – and it is for this reason that Central Banking’s 2025 Financial Stability Initiative award is being given to both the Bank of Finland and Fin-FSA.

Leo Piirto, an economist at the central bank, says the credit register was a positive step in more ways than one. “Beforehand, there was just kind of a negative register,” he says. “If people didn’t pay their loans, it would be recorded as a negative. Now, each and every loan, and all the updates that are involved, are constantly up to date.”

Johanna Honkanen, a senior economist at the bank, says the register provides an overview of the financial obligations of every Finnish citizen. “During periods of economic disruption and crisis, highly up-to-date information is needed to quickly form an upgraded situational overview of the debt markets,” she says.

As well as information on individuals’ debt levels, the register lists payment details for loans. “This includes any possible payment delays, so assessing debt-servicing costs and difficulties is easier than before,” says Honkanen. “We can now identify early signs of financial stress in specific groups, such as households or individuals with high debt-service-to-income ratios.”

She says the register also enables the bank to assess an individual’s interest rate risk and their vulnerability to a monetary policy shock. “It includes information on individuals’ income, their debt arrangements and any interest rate caps and interest-only periods,” she says. “Trends like increased loan defaults and payment difficulties can act as early-warning indicators for an economic downturn or a period of financial stress.”

The analytical platform enables the bank to group together individuals who have taken out specific types of loan, and see whether there are significant levels of indebtedness in a particular category. “The data enables us to devise household-level stress tests and formulate macroprudential policies aimed at mitigating risks to the financial system,” says Honkanen.

Ville Voutilainen, senior data science economist at the bank, says the development of the register and analytical platform have been timely, given the rising levels of household indebtedness in the long term.

“We’ve been warning for quite some time that we think the high aggregate level of indebtedness is a key structural vulnerability for the financial system,” he says. “Now we get to see the tails. We get to see much better how much of those tails contribute to the average.”

One area in which the platform has proven especially useful is in monitoring compliance with the Fin-FSA’s recommendation on mortgages, which came into effect in 2023. This stipulated that home loans should only be granted, as a rule, to applicants whose total loan-servicing costs would remain below 60% of their net income during periods of financial stress. Honkanen says the platform enables the authorities to identify potentially harmful developments in lending practices and intervene in real time. These interventions can range from discussions with lenders about the reasons for non-compliance to administrative sanctions. “Previously, similar monitoring could only be carried out with separate questionnaires for mortgage providers,” she says.

Cloud atlas

The analytical platform also marks a technological step change, as it is one of the first cloud-based data platforms to have been adopted within the European System of Central Banks.

“Before, we had siloed, distributed data warehouses and data science environments,” says Voutilainen. “It was all over the place, with analysis platforms here and computing clusters there. Now we have a single point of contact for a platform offering us end-to-end, full-stack, data-science solutions. Collaboration between departments is now much easier. Allowing people to merge datasets from different departments becomes really easy.”

For Anthony Baltzar, the chief architect of the bank’s IT systems, the game-changing element of the platform is its ability to host large amounts of confidential data securely in the cloud.  “We really had to work with the security controls so that we were able to have our most sacred data on there,” he says. “We have our first confidential dataset in the cloud, and now we can move other highly confidential datasets there too. I’m not aware of any other central bank, at least in the euro area, that has the same amounts of confidential data in the cloud.”

Baltzar says that using the cloud is more than just a technological leap, it is actually more secure than relying on a physical, on-the-ground system.

“Previously, we kind of trusted our network peripherals – we would have our firewall and whatnot in place,” he says. “But now in the cloud era, the security is more layered and more complex, which means we have even better control because of the zero trust principles. So I think that we are better off in the cloud than we were with our on-premises, office network systems.”

Voutilainen cites another reason for the advantages the cloud offers compared to its technological precursors. “We are no longer reliant on a single technology; we can now store data in the cloud as well, which strengthens our resilience by providing alternative ways of data storage.”

The Central Banking Awards 2025 were written by Christopher Jeffery, Daniel Hinge, Daniel Blackburn, Joasia Popowicz, Riley Steward, Jimmy Choi, Levente Koroes, Thomas Chow and Blake Evans-Pritchard