As the existing procedures are usually based on dated legacy systems and manual processes, appropriate use of innovative technologies such as artificial intelligence, cloud platforms and APIs can surely help refine supervisory processes. 17. For example, our granular data reporting (GDR) which started in 2019 seeks to collect transactional level data from banks, instead of template based aggregate data in the past. This has enabled us to discover insights and trends in a timely manner and conduct advanced analyses through slicing and dicing the data collected. But this is only possible with very fundamental changes in the way we analyse the risks of banks, with new people, new organizational structure, new IT systems as well as continued experimentation by colleagues with different skills and expertise. 18. One thing we have learnt is that the prerequisite for such a digitalization journey is to have strong commitment by all colleagues from top to bottom, and for everyone to have the mindset for embracing changes. Although we are already seeing some concrete positive outcomes from our digitalization project, we are still at the early stage of this long journey. I would love to hear the experience of other central banks and regulators at this or other forum. Conclusion 19. I have highlighted just three areas, namely payment and CBDC, use of data, and digitalization of our own organization, as some of the key challenges many of us are facing. There are many more technological developments in the banking sector that we have to understand, regulate or promote.
The significance of IT is visible in two ways; in production and use. If we look at the production of IT, we can observe that the telecom industry's share of total industry is relatively large in Sweden compared with many other countries. This means that the rapid development in productivity that has occurred in the telecom sector has contributed to pushing up productivity growth in the business sector as a whole. If we instead look at use of IT, Sweden has a relatively large share of IT capital in the total capital stock, compared with other countries. Sweden is in this respect more like the United States than continental Europe. The use of IT means that one can simplify and automate the work so that those who work can carry out more tasks in a shorter time, that is, productivity increases. The financial sector is very skilled at making use of IT to increase productivity. Its customers currently carry out many simple tasks from home in front of their computers instead of going to a bank office. During the second half of the 1990s, major investments were made in IT capital. These investments accounted for approximately half of the growth in productivity during the period 1996-2000 (see Figure 4). The investment upturn was broken in connection with the IT bubble bursting at the beginning of the 2000s. After that the contribution from IT capital to productivity growth has declined substantially.