knowledge 10 June 2026 |

Inside the CBI’s Updated Supervisory Framework: Key Takeaways for Firms

The updated report seeks to clarify the CBI’s supervisory approach, while also introducing a number of updates to that approach. The supervisory outcomes continue to focus on the protection of consumer and investor interests, safety and soundness of firms, financial stability and the integrity of the financial system. The report emphasises a proportionate, risk-based approach to supervision, supported by effective regulation and enforcement. This approach is also reflected in the CBI’s roadmap for a more effective and efficient framework (for more information, read our briefing on that roadmap: The CBI’s Roadmap for Simplifying Regulation and Supervision: An Effective and Efficient Approach). In its Approach to Supervision 2026 the CBI explains that it expects firms to have strong governance and proactive risk management, meet all legal and regulatory obligations, whilst complying with the Individual Accountability Framework (IAF).

Supervisory Approach and what to be aware of

The CBI notes that innovation, digitalisation, and growing interconnected risks are reshaping the landscape and while its regulatory role and the sectors it oversees have evolved significantly, its core safeguarding objectives remain the same. The supervisory principles set out shared approaches to achieving its safeguarding goal:

1. outcomes-focused: the CBI focuses its limited resources on risks that pose the greatest threats to its safeguarding outcomes by using its powers proportionately, escalating and taking enforcement action where needed to achieve its objectives. The CBI does not operate a no-failures regime, but expects firms to identify and manage risks effectively, and to limit impacts on consumers, investors and the wider economy if those risks materialise.
2. risk-based: the CBI targets the most significant risks to achieving safeguarding goals. It uses data, judgement and insight in a proactive, forward‑looking way, focusing on resolving issues and ensuring fair outcomes. It also ensures firms take responsibility for managing the risks in their business.
3. judgement-led: the CBI’s supervisory approach combines data, analysis, and information with informed judgement, enabling it to respond quickly to new developments.
4. forward-looking: the CBI takes a long-term view to anticipate trends and emerging risks to respond more efficiently and effectively.
5. firms’ responsibilities: the CBI promotes resilience, adaptability and trust in financial services, while placing primary responsibility on firms’ boards and management to identify, manage, and mitigate risks.

Supervisory Framework in Practice

The CBI divides the financial system into three main categories: Banking & Payments, Insurance and Capital Markets & Funds, covering all regulated firms. The CBI adopts two supervisory approaches: sectoral supervision, which assesses risks, trends and vulnerabilities across each sector to guide supervisory priorities, and close and continuous supervision, which focuses more intensively on key firms whose activities could significantly impact its safeguarding objectives.

Close and Continuous Supervision

In its 2026 report, the CBI expanded the scope of close and continuous supervision, introducing a more structured and tiered supervisory model.

Firms with the greatest impact on safeguarding outcomes are subject to close and continuous supervision at an individual level by multi-disciplinary teams, alongside sectoral supervision. As per the 2025 report, the selection for close and continuous supervision is based on:

• systemic importance and risk that failure could impact financial stability locally and globally;
• scale and nature of risks posed to consumers and investors, including the type of products, nature of customers and/or how easily services can be replaced;
• exposure to financial crime risks due to the nature and scale of activities; and
• CBI’s experience supervising these firms and their assessment on the firm’s capacity to manage these risks.

Firms will be subject to close supervisory engagement and ongoing assessment across interconnected risk areas, namely, Business Model & Strategy Risk, Culture, Governance & Risk Management, Operational Resilience Risk, Financial Resilience Risk and Financial Crime Risk. In addition, the CBI will maintain a set level of annual engagement with key individuals within these firms. The 2026 report notes that even if a firm is not supervised on a ‘close & continuous’ basis it may still have increased supervision for a period of time. This can be due to several factors including previous supervisory requirements or where considerable changes have been made to the business model.

Supervisory Risk Management

The CBI identifies and prioritises key risks and trends across firms and sectors, particularly where these may threaten safeguarding objectives or exceed risk tolerance. It outlines these priority risks annually in its Regulatory and Supervisory Outlook report (RSO), which highlights key sectoral trends, risks and planned activities. The CBI applies proportionate supervisory and enforcement measures to address identified risks, with actions tailored to firms’ capabilities, implementation progress and potential impact of issues. Enforcement focuses on serious breaches and alignment with supervisory priorities.

Key Takeaways

The CBI’s supervisory approach recognises that the four safeguarding outcomes are interdependent and risks are often interconnected. By adopting a more integrated, outcome-focused framework, the CBI simplifies supervision for itself and firms, meaning firms receive clearer, more consistent communication, benefit from streamlined engagement through multidisciplinary teams and are supervised in a more proportionate, effective and efficient way. In relation to close and continuous supervision, the 2026 report notes that firms will be advised of this by the CBI.

How Can McCann FitzGerald LLP Help?

McCann FitzGerald LLP is a premier law firm in Ireland with deep expertise in relation to financial services regulation. If you would like to discuss further or require any specific financial services regulatory advice, please contact us.