Hi SupTech Community,
Welcome to the 22nd 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 would 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 Financial Conduct Authority , Saudi Central Bank – SAMA , Monetary Authority of Singapore (MAS), Toronto Centre, International Monetary Fund, European Central Bank , Hong Kong Monetary Authority (HKMA), AIR – Alliance for Innovative Regulation, Network for Greening the Financial System (NGFS) and others.
Suptech Innovations
Securities and Exchange Board of India (SEBI) working on artificial intelligence (AI) tool to review initial public offering (IPO) documents. Speaking at an industry event organised by FICCI, SEBI chairperson Madhabi Puri Buch mentioned that the capital markets regulator is working on a mechanism to expedite IPO approvals, where companies can fill in the blanks in a template to get the go-ahead. The tool is AI-based and is expected to be operational by December. Read more here.
Saudi Central Bank (SAMA) launches government banking services digital platform ‘NQD’. The ‘NQD’ tool aims to digitise the financial transactions of government entities on their accounts at SAMA by offering a unified and secure digital platform. This platform facilitates access to their account information, enables efficient management of their accounts, and provides instant monitoring of transactions to and from government entities. Read more here.
Central Banking & Technology
Hong Kong Monetary Authority (HKMA) launches generative AI (GenAI) sandbox. The HKMA, in collaboration with tech hub Cyberport, announced the launch of the GenAI sandbox at FiNETech2, which aimed to help foster the adoption of the technology in the city’s banking industry while mitigating potential risks. The financial authority will draw insights from this initiative and share good practices while keeping its guidance relevant and fit-for-purpose in light of the latest developments. Read more here.
Bank of Italy develops custom bitcoin consensus for central bank distributed ledger technology (DLT). The Bank of Italy has published a new DLT protocol, which it believes will have significant implications for work on central bank digital currencies and asset tokenisation. The Frosted Byzantine Fault Tolerance protocol aims to strengthen a permissioned ledger’s security, its resilience in dealing with faults or fending off attacks, and the confidentiality of its validators. Read more here.
Monetary Authority of Singapore (MAS) to conduct quantum security trials with major banks and technology partners. The to embark on quantum security collaboration and study the application of quantum key distribution (QKD) in financial services. QKD can help financial institutions protect the exchange of cryptographic keys to address the cybersecurity threats posed by quantum computing. Read more here.
Brazil’s Financial and Technological Innovations Laboratory (LIFT Lab) resumes innovation projects. LIFT, an accelerator-style initiative backed by Brazil’s central bank alongside the National Federation of Associations of Central Bank Servers, has resumed its activities after an ‘indefinite suspension’ of its operations last year. Seven projects will be participating in the ‘2023/2024’ edition, encompassing technological solutions for preventive anti-money laundering and compliance, interoperability gateway, GreenFi decentralised finance for sustainability, KYC (blockchain-based know-your-customer) for credit rating, PIX alias score, smartsafe and guaranteed agribusiness token. Read more here.
Financial Reporting Council (FRC) launches discussion paper on the future of digital reporting in the United Kingdom (UK). The paper seeks to gather feedback on crucial developments in digital reporting. It aims to help shape the future of digital reporting in the UK, ensuring that it meets the needs of all users while promoting comparability, transparency, and efficiency in corporate reporting. It also addresses changes in the regulatory landscape and considers the impact of the recently passed Economic Crime and Corporate Transparency Act 2023. Several stakeholders, including preparers of financial reports, software vendors, investors, accountants, and regulators, can submit feedback by November 1, 2024. Read more here.
UK’s Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA) seek input on big tech and digital wallets. Both authorities are collaborating to publish this call for information so that they can understand the opportunities and risks that the increasing popularity of digital wallets creates. Many issues are likely to interest both organisations, including those relating to consumer protection and market integrity. Stakeholders across the payments and broader financial services landscape are invited to submit their views by September 13, 2024. Read more here.
Arab Emirates (UAE) launches charter for the development and use of AI. The UAE has introduced a set of guidelines to ensure that AI is developed and used fairly and safely for everyone. The guidelines aim to establish robust principles and frameworks for applying the most advanced AI models. They will focus on strengthening the relationship between humans and machines and make sure everyone can access and benefit from AI advancements. Additionally, it covers compliance with the laws related to the development and use of AI. Read more here.
International Association of Insurance Supervisors (IAIS) consults on climate risk supervisory guidance. This fourth consultation on climate risk in the insurance sector includes proposed new supporting material that better reflects climate-related risk as part of effective supervisory practice. It covers supervisory reporting and public disclosure issues, macroprudential considerations and supervisory cooperation. Feedback on this is invited by Monday October 28. Read more here.
Central bank digital currencies (CBDCs) amplify contractionary effects of monetary shocks, Bank of Canada (BoC) paper reveals. In response to a traditional monetary policy shock, introducing a zero-interest CBDC tends to magnify the contractionary effects. The explanation of these effects is partly because a zero-interest CBDC raises the overall cost of liquidity, weakening the new monetarist channel that typically offsets some of the downturns in output and consumption. Conversely, in the case of a positive reserve quantity shock, the study finds that a CBDC could mitigate the effects on investment, consumption, and output. Read more here.
Indonesia: Financial sector assessment program – Detailed assessment of observance -Basel core principles for effective banking supervision. The Financial Services Authority (OJK) has made substantial progress in updating its regulatory and supervisory frameworks since the last financial stability assessment program (FSAP) in 2017. The OJK has strengthened its regulatory framework, implementing the Basel III post-crisis reforms. The authority has also developed supervision capabilities and deployed innovative supervisory technologies (suptech) to achieve greater efficiency in banking supervision. Read more here.
Events
Certified Financial Supervisor (CFS) Level 2: Digital Financial Services Supervision (DFS) begins on September 16. This virtual program hosted by Toronto Centre empowers supervisors to better understand DFS and the implications of these emerging technologies. Through group activities and case studies, participants will learn how to assess the risks in DFS products and processes, the potential threats to financial stability and market conduct mandates, and how to formulate an appropriate supervisory strategy. Read more here.
Training on selected issues in the regulation and supervision of fintech (SIFR). This virtual course, presented by the Monetary and Capital Markets Department at the International Monetary Fund (IMF), is designed to be interactive by combining lectures, case studies, and discussions. The training focuses on the regulation and supervision of technology-enabled innovation in financial services (fintech), the growth of supervisory and regulatory technology (RegTech/SupTech), the growth of emerging technologies like artificial intelligence, among other topics. The course focuses explicitly on helping authorities understand and implement global standards on crypto assets, including stablecoins. Registration closes on September 27, 2024. Read more here.
Alliance for Innovative Regulation (AIR) techsprint for greater government transparency demo day to take place on August 28. The techsprint is organised by AIR, Inter-American Development Bank (IDB), and the Bureau of International Narcotics and Law Enforcement Affairs (INL) at the US Department of State (DOS). It began virtually on July 15 and will conclude with a hybrid period of collaboration from August 26-27, 2024, and a Demo Day on August 28, 2024. The techsprint is bringing together InvestmentMap stakeholders, technologists, and transparency and anti-corruption experts to identify solutions and build prototypes to address transparency in tackling corruption in public spending, public investment and public procurement. It will identify innovative technological enhancements to the InvestmentMap platforms that can be further developed and adopted by implementing countries throughout Latin America and the Caribbean. Read more here.
The Cambridge SupTech Lab’s Practical Data Science in Financial Supervision course begins on 9th September. The 6-week, online, asynchronous training programme centres on applying best practices and cutting-edge tools to achieve data-driven supervision through a series of theoretical modules and hands-on exercises. Designed for both supervisors and data scientists, the course equips participants with the skills to unlock the full potential of data science while maintaining ethical and responsible data collection, handling, and analysis using AI and other advanced technologies. To learn more about the programme, and to enrol, click here.
The Cambridge SupTech Lab is facilitating a NextGenAI Bootcamp as part of three events organized by Currency Research. The three bootcamps are being held in person in London (25 September), New Orleans (04 November) and Cape Town (26 November). Bootcamp participants will gain insights into the evolving AI landscape and its transformative impact. They will dive into AI fundamentals and models, explore machine learning and natural language processing, and examine ethical considerations as well as the role of public-private partnerships and collaborations in developing AI strategies. To learn more and register, go here.
