Use of big data sources and applications at central banks 2020 survey conducted by the Irving Fisher Committee on Central Bank Statistics (IFC) February 2021
Big data sources are developing fast, and applications for making use of this new information are flourishing in parallel. This primarily reflects the impact of digitisation, with the development of the “internet of things” as well as a greater ability to digitally process “traditional” information, such as text. It is also a consequence of the large databases that have been created as an “organic” byproduct of the complex operations taking place in our modern societies. Additionally, vast amounts of data have emerged in the administrative, commercial and financial areas, an evolution spurred by the important data collection strategies undertaken after the Great Financial Crisis (GFC) of 2007–09 in order to address the information challenges posed by the development of finance. Central banks are no exception to this general picture. They have shown an increasing interest in using big data in recent years, as already documented extensively by the Irving Fisher Committee on Central Bank Statistics (IFC) (IFC (2017), Nymand-Andersen (2016), Mehrhoff (2019), Tissot (2017)). Central bank big datarelated work covers a variety of areas, including monetary policy and financial stability as well as research and the production of official statistics. However, in contrast to the rapid pace of innovation seen in the private sector, big data applications supporting central banks’ operational work had initially been limited. This reflects a number of constraints, such as a lack of adequate resources as well as the intrinsic challenges associated with using big data sources to support public policy. Looking ahead, will central banks catch up and radically transform the way they operate in order to fully reap the benefits of the information revolution? Or will their use of big data sources and applications progress only gradually due to the inherent specificities of their mandates and processes? To shed light on these issues, in 2020 the IFC organised a dedicated survey on central banks’ use of and interest in big data, updating a previous one conducted five years earlier. 2 The survey focused on the following key questions: What constitutes big data for central banks, and how strong is central banks’ interest in it? Have central banks been increasing their use of big data and, if so, what were the main applications developed? And finally, which constraints are central banks facing today and how can they be overcome?