Data-driven policy-making for central banks focus report 2021

As the world becomes more digital, big data is changing how information is being collected, stored, organised and processed. Central banks have never had more information on their doorstep, nor such an opportunity to improve policy-making. 

The Covid-19 pandemic has highlighted the fact that using current infrastructure, data harmonisation is difficult, inaccurate, costly and resource-intensive. New forms of technology have been adopted by a few central banks: artificial intelligence and machine learning have undoubtedly helped ease some of these challenges. But many are yet to make use of new data architecture. 

In this report, Central Banking discusses why data is so crucial for central banks to make effective policy decisions and why current traditional indicators that are no longer fit for purpose. The pandemic has highlighted the need for an overhaul of data management within the central banking community – whether the recent crisis proves to be a turning point, only time will tell.