Hi SupTech Community,
Welcome to the 20th issue of the Cambridge SupTech Lab bi-weekly LinkedIn newsletter, a source for updates on recent innovations, breakthroughs, opportunities, upcoming events in the suptech field, and news from the Cambridge SupTech Lab team.
If you like to flag any items for inclusion in the next newsletter, please email us at cambridgesuptechlab@jbs.cam.ac.uk. Occasionally, we email our global community of supervisors, data scientists, vendors, and suptech experts to share event invites, news, or new courses—subscribe here.
This edition includes news from the Bank for International Settlements – BIS, European Banking Authority (EBA), European Securities and Markets Authority (ESMA), Toronto Centre, Reserve Bank of Australia, Monetary Authority of Singapore (MAS), Global Government Fintech, Network for Greening the Financial System (NGFS), Finextra, the World Economic Forum and others.
Suptech Innovations
Isle of Man rolls out digital verification for company owners. The Isle of Man government is implementing a digital identity verification solution for its Central Registry. The organisation has awarded the contract to local digital identity firm SQR, alongside software development and digital transformation specialist PDMS. The SQR identity verification solution assures the Central Registry that beneficial owners are who they say they are, by validating the data held on the registry. Read more here.
The SupTech Frontiers training programme, from Cambridge SupTech Lab, Cambridge Centre for Alternative Finance, begins on 22 July 2024. Through a 6-week, immersive, online experience that draws on real-world case studies leveraging the Lab’s digital tools, participants gain: a comprehensive understanding of the interplay between data, technology, and evolving business models in the financial sector; a pragmatic framework to assess and address the impacts of fintech and digital assets innovations, the related risks across supervisory areas, and ongoing market innovations; the ability to identify supervisory use cases that suptech can upgrade or rearchitect; and a certificate of completion from the Cambridge Judge Business School. Read more and enrol here.
Co-led with the World Economic Forum, Cambridge SupTech Lab has launched a pioneering secondment programme across the public and private financial sectors. The Public-Private Secondments for SupTech Innovation initiative pairs highly trained experts from the private sector with financial authorities around the world for short-term, remote and in-person secondments that accelerate the digital transformation of financial supervision, leading to a more efficient, safer and sounder global financial system. The Cambridge SupTech Lab and World Economic Forum will facilitate the collaboration between the organisations and support the secondee from start to finish. Learn more here.
Central Banking & Technology
Bank for International Settlements (BIS) launches joint project to map supply chains. The BIS has launched Project Insight to explore how to better monitor developments in global value chains (GVCs) by combining structured and unstructured granular data and applying big data analytics tools. The project will be done in conjunction with several other global institutions such as the Hong Kong Monetary Authority, the International Monetary Fund, the World Trade Organization, the Asian Development Bank, the Organisation for Economic Co-operation and Development, the United Nations and DIW Berlin (German Institute for Economic Research). Read more here.
Reserve Bank of Australia (RBA) to migrate to a third-party data centre. The RBA has outlined plans to outsource migrating “all workloads” from an on-premises to a third-party data centre under its core modernisation program. The central bank made plans to set up a new colocation data centre and to modernise its core infrastructure late last year. It has since said it will put its infrastructure and workloads in CDC Data Centres under a A$37 million deal. Read more here.
The European Central Bank’s (ECB) Vice-Chair of the Supervisory Board calls for embedding a strong data culture in supervision. At the Data Innovation for the Future of Regulation (DIFoR) conference, organised by the Financial Conduct Authority, Mr. Frank Elderson, the Vice-Chair of the Supervisory Board and the Member of the Executive Board of the ECB, remarked that it was paramount to embed a strong data culture in the supervisory work. He touched upon how supervisors can use Artificial Intelligence (AI) and large language models for routine yet often time-consuming tasks and gave the example of ‘Athena’ – an AI driven platform that helps supervisors find, extract and compare information from a wide variety of sources. Read more here.
Hong Kong Monetary Authority (HKMA) and the Banque de France (BdF) join forces to explore the use of wholesale central bank digital currency (CBDC) and tokenisation for cross-border transactions. The HKMA will conduct joint tests with the BdF, under the second wave of the European Central Bank’s (ECB) Eurosystem exploratory work. The two institutions will delve into the study of interoperability between their wholesale CBDC infrastructure, i.e. the BDF’s DL3S2 and the HKMA’s Ensemble Sandbox3, with the main focus on real-time cross-border and cross-currency payments. Under the memorandum of understanding, the BDF and the HKMA agree to strengthen communication and collaboration, as well as to lay the foundations for further efforts on tokenisation and new technologies. Read more here.
New York Department of Financial Services (NYDFS) adopts guidance on AI use by insurance firms. The NYDFS has adopted guidance to protect consumers from unfair or unlawful discrimination by insurers using artificial intelligence. The guidance outlines DFS’s expectations for how all insurers authorized to write insurance in New York State develop and manage the integration of external consumer data and information sources (ECDIS), artificial intelligence systems (AIS), and other predictive models. Read more here.
Network for Greening the Financial System (NGFS) publishes report on adapting central bank operations to a hotter world. Over the past years, a number of NGFS member institutions have gathered experience with considering climate-related factors in their monetary policy operations. Actions that central banks have taken span across all of the high-level options set out in a report that the NGFS published in 2021 – that is credit operations, asset purchases, and collateral policies. The newly published report complements the 2021 report by presenting eight case studies of measures implemented by NGFS members and discussing the practical insights that can be gained from these. These case studies demonstrate that while practical challenges remain for “greening” central banks’ operations, including on data availability issues, they can be overcome. Read more here.
European Securities and Markets Authority (ESMA) publishes latest edition of the spotlight on markets newsletter. This newsletter issue focuses on ESMA’s Final Report on Greenwashing, the 2023 Annual Report and other important updates in the realm of the regulation on the markets in crypto-assets or MiCA. On the latter, ESMA released its final report and guidelines on suitability of management body members and shareholders. Read more here.
Basel Committee publishes a consultation on principles for the sound management of third-party risk. The proposed principles provide guidance to banks and prudential supervisors on effective third-party risk management, aiming to enhance banks’ ability to withstand operational disruptions and mitigate the impact of severe disruptive events. Comments on the proposed principles are invited by 9th October 2024. Read more here.
International Association for Trusted Blockchain Applications (INATBA) publishes report on artificial intelligence (AI) and blockchain convergences. The report explores how AI and blockchain technologies can converge to redefine industries and societal norms, from decentralized finance to healthcare. It examines their role in enabling data economies and enhancing digital interactions, covering topics like AI-driven trading strategies and digital twins. The publication also addresses challenges in data sharing and proposes solutions for improved data integrity and consent management. Read more here.
European Banking Authority (EBA) publishes its annual report on the convergence of supervisory practices for 2023 and unveils the European Supervisory Examination Programme (ESEP) for 2025. The annual report highlights the European Union (EU)-wide, consistent implementation of 2023 priorities in supervisory work programmes but underlines the need for further consistency in the identification and treatment of risks covered by Pillar 2 requirements. The ESEP, on the other hand, identifies key topics for heightened supervisory attention across the EU. It aims to drive supervisory convergence by providing competent authorities with a single set of priorities for implementation in 2025. Read more on the annual report here and on ESEP here.
Stepping Up Venture Capital to Finance Innovation in Europe. This International Monetary Fund (IMF) working paper compares the productivity growth and investment in R&D in European Union (EU) to the US. Many of the successful startups in the EU move abroad for better financing opportunities, this results in EU losing out on the direct growth benefits as well as the positive spillovers from these startups. To address this, the EU should focus on developing its Venture Capital (VC) ecosystem by reducing regulatory barriers, creating tax incentives for R&D, and implementing key Capital Markets Union (CMU) reforms. Read more here.
Events
2024 Open Finance PH Hackathon. The Bangko Sentral ng Pilipinas (BSP), in partnership with the International Finance Corporation (IFC) and supported by the Government of Japan, is inviting industry experts in technology, banking, and financial services to join their hackathon to showcase the innovative use cases enabled through open finance. The hackathon is set to take place from July 15 to August 7, 2024. Read more here.
International leadership program for securities supervisors. Organised by the Toronto Centre, this virtual program designed for mid- to senior-level staff and managers involved in regulation and supervision of the securities sector is set to occur between 29th July and 02nd August, 2024. The key themes that will be covered include financial crime prevention, cyber risk, climate-related disclosures, surveillance and investigation approaches, and artificial intelligence and suptech. Read more here.
Singapore FinTech Festival (SFF) 2024 returns with a focus on artificial intelligence (AI) and quantum technology. Organised by the Monetary Authority of Singapore (MAS), Elevandi, and Constellar, in collaboration with The Association of Banks in Singapore, SFF’s 2024 9th edition will take place from 6th to 8th November preceded by the Insights Forum from 4th to 5th November. The event aims to explore how AI and quantum computing can revolutionize financial services and drive sustainable and inclusive economic growth. Amidst global challenges like climate change, SFF 2024 will also emphasize fintech’s role in advancing sustainable finance and feature exclusive dialogues, signature side events, the global fintech Hackcelerator, the Blockchain Guardians Programme, and numerous networking opportunities. The MAS and Singapore FinTech Association (SFA) are inviting nominations for 2024 SFF FinTech Excellence Awards with submissions due by August 8th. Read more and register here.
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