Hi SupTech Community,
Welcome to the 29th 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 Bank for International Settlements, Central Banking, European Central Bank , European Investment Bank, Financial Stability Board, Finextra, Global Government Fintech, International Association of Insurance Supervisors, Regtech Africa, Securities and Exchange Board of India, and others.
** SupTech Week 2024, 9 – 13 December **
SupTech Week 2024 was a resounding success! Over 1500 leaders from 140 countries joined the event, making it the largest gathering in financial supervision of its kind. Thank you to our 166 speakers, to all those who contributed to the vibrant discussions and knowledge exchange, and to our content partner for the virtual portion of the event, the World Economic Forum. Recordings of the 42 live sessions can be viewed here.
The conversations throughout the week were grounded in findings from our annual State of SupTech Survey. This year’s full report is coming soon, read the Executive Summary here.
Suptech Innovations
European Central Banks to explore the use of generative artificial intelligence (AI) for inflation nowcasting. Project Spectrum, an initiative of the Bank for International Settlements (BIS) Innovation Hub Eurosystem Centre in collaboration with the European Central Bank and Deutsche Bundesbank, aims to transform raw big data into accessible information using advanced AI technologies for more accurate inflation nowcasting. Leveraging the European Central Bank’s Daily Price Dataset and insights from the Eurosystem Centre’s Project Gaia, the initiative will map data to standardised household expenditure categories like the United Nations’ Classification of Individual Consumption According to Purpose (COICOP). While initially focused on European data, the project’s AI models, including large language models (LLMs), could be applied globally, extending to multiple languages and retail data beyond Europe. Read more here.
Securities and Exchange Board of India (SEBI) launches chatbot “SEVA” for investors. In line with its mandate of investor protection, SEBI launched SEBI’s Virtual Assistant (SEVA) – an AI based conversation platform for investors. The Beta version of the chatbot includes features like citations for generated response, speech-to-text and text-to-speech functionality for accessibility, follow-up questions, etc. The chatbot is presently enabled to answer questions relating to general information on securities market, latest master circulars, grievance redressal process, etc. Based on the feedback received from the users, additional areas will be added to the chatbot. Read more here.
Central Banking & Technology
Bank for International Settlements Innovation Hub (BISIH) announces 2025 analytics challenge to combat financial crime. The BISIH is inviting participants to develop innovative, cost-effective solutions for detecting illicit activities and enhancing global financial system integrity. Given the $3 trillion in money laundering and $442 billion in fraud losses last year, new technologies can help safeguard privacy while tackling financial crime. The BIS has explored solutions through projects like Mandala, Hertha, and Aurora and now seeks global input. Shortlisted proposals will be showcased at the BIS Analytics Showcase in London on 27-28 March, with winners potentially developing their solutions further with the BIS. Read more here.
FNA & SQL Power announce a global suptech partnership. The collaboration combines FNA’s network analytics capabilities with SQL Power’s suptech software Power’s real-time advanced analytical software to deliver a fully integrated, end-to-end solution for more efficient and proactive financial supervision. This partnership builds on their joint work with the Central Bank of the United Arab Emirates as part of an Accenture-led consortium focused on transforming financial infrastructure with suptech and enterprise data management (EDM) technologies. Read more here.
European Investment Bank’s (EIB’s) sixth digital bond completes contribution to wholesale central bank digital currency (CBDC) trials. The EIB priced its sixth digital bond, just one week after its fifth issuance, further supporting Eurosystem trials of innovative technologies for wholesale central bank money settlement. The €100 million, five-year bond, maturing on 22 November 2029, marks the EIB’s second contribution to the wholesale CBDC trials, completing its role in this phase of the project. Read more here.
Brazil to test CBDC for automated settlement of agricultural commodity transactions. Banco Central do Brasil (BCB) is focusing its CBDC experimentation, named ‘Drex,’ on automating the settlement of agricultural commodity transactions. In collaboration with Banco Inter, 7COMm, Microsoft Brazil, and Chainlink, the pilot aims to demonstrate cross-border, multi-currency, and multi-platform automated settlements in trade finance. Using blockchain and oracles, the solution will streamline supply chain management and improve trade finance processes. Read more here.
United Kingdom (UK) ‘digital gilt’ pilot to run independently from Debt Management Office. The UK government will launch a pilot for a ‘digital gilt’—referred to as ‘DIGIT’—using distributed ledger technology (DLT). Announced by Chancellor Rachel Reeves and detailed by Economic Secretary Tulip Siddiq, the pilot aims to issue a digital bond with similar features to a conventional gilt, but will operate separately from the Debt Management Office (DMO) due to its experimental nature. DLT, which includes blockchain, allows secure, simultaneous transaction records and can automate steps in a bond’s lifecycle, such as interest payments. Read more here.
BIS and Central Bank of Brazil announce winners of G20 TechSprint. Fifteen shortlisted teams from around the world competed to develop innovative technological solutions to address sustainable finance challenges related to the United Nations Sustainable Development Goals (SDGs). The solutions focus on promoting the adoption and scaling of nature-based solutions, improving environmental, social, and governance (ESG) data reporting, and accelerating progress toward the SDGs. The winning teams are Ekonavi from Brazil, Tese from Hong Kong and Kaleidofin from India. Read more here.
SEBI introduces new guidelines to enhance accountability and governance in stock exchanges and other market infrastructure institutions (MIIs). These guidelines include resolving whistleblower complaints within 60 days, adopting regtech and suptech for better regulatory and supervisory mechanisms, and establishing standard operating procedures for disciplinary actions against key management personnel. They also require MIIs to increase transparency through consistent disclosure of key information and regulatory actions on their websites, ensuring better regulatory compliance and risk management across the board. These regulatory changes will take effect from April 1. Read more here.
Seven central banks, in collaboration with the BIS, have published new reports exploring key legal and system design considerations for central bank digital currencies (CBDCs). The authorities have been exploring key aspects of CBDCs for the public. While no jurisdiction has yet decided to issue a retail CBDC, recent reports focus on legal and system design considerations. The legal paper addresses issues like CBDC classification, participant obligations, privacy, and cross-border concerns. The system design paper highlights key areas such as privacy, cybersecurity, offline functionality, and point-of-sale considerations. These insights aim to guide jurisdictions in developing tailored legal frameworks and robust, collaborative CBDC systems. Read more here.
Central Banks prioritise legacy instant payment systems over CBDCs. According to the latest Future of Payments survey by the Official Monetary and Financial Institutions Forum (OMFIF), central banks increasingly favor legacy instant payment systems, like the US FedNow, over CBDCs, with support for CBDCs dropping significantly from 31% in 2023 to 13% in 2024. Geopolitical concerns and the ongoing dominance of the US dollar as a global settlement currency further contribute to this trend. While there is growing interest in tokenization to improve payment efficiency, initiatives like the BIS’s Project Nexus highlight that traditional systems will likely continue to lead in the near term. Read more here.
Retail fast payment systems (FPS), like Brazil’s Pix, India’s UPI, and Switzerland’s TWINT, are driving the adoption of digital finance apps, particularly in lower-income economies. This BIS working paper shows that FPS boosts app usage by increasing competition, fostering innovation, and expanding access to financial services. FPS with central bank involvement, real-time settlement, and open membership are especially effective in promoting digital finance adoption. These insights highlight the key role of FPS in accelerating digital financial services and enhancing financial inclusion, particularly in emerging markets. Read more here.
Hong Kong unveils roadmap for implementing sustainability reporting standards. The Hong Kong government has introduced a roadmap outlining the adoption of the International Financial Reporting Standards – Sustainability Disclosure Standards (ISSB Standards) for public entities, with full implementation targeted by 2028. The roadmap laid out new mandatory climate reporting requirements and outlined further ecosystem support through further sustainable financing and an expanded Hong Kong Taxonomy for Sustainable Finance. Read more here.
European Central Bank (ECB) outlines its supervisory priorities for 2025-27. In its latest framework, the ECB has identified three key priorities for the banking sector: Strengthening resilience against financial threats and geopolitical shocks, ensuring prompt remediation of significant weaknesses, and tackling the risks posed by emerging digital technologies. These priorities are aligned with specific vulnerabilities within the sector, and the ECB has developed targeted work programmes to address them. By recognising cross-dependencies between these risks, the ECB aims to improve the effectiveness and efficiency of its supervisory approach. Read more here.
Financial Conduct Authority (FCA) proposes new cryptoasset rules to enhance market integrity and consumer protection. The FCA has released a Discussion Paper outlining proposed rules for cryptoasset admissions, disclosures, and market abuse to create a safer, more transparent crypto market. The proposals aim to strike a balance between reducing risks, such as fraud and money laundering, while fostering innovation and long-term growth in the sector. Key measures include improving regulatory clarity, ensuring consumers have adequate information before engaging in transactions, and establishing controls to ensure fair trading. The FCA invites feedback from a wide range of stakeholders by 14 March 2025 to refine these proposals. Read more here.
A new paper by Patty Duijm and Iman van Lelyveld explores how central banks and supervisory authorities can effectively leverage data science to enhance financial system safety. The study, based on the authors’ experience at the Dutch central bank (DNB), highlights the significant potential of data science to support financial stability through nine practical lessons. The paper argues that successful implementation of data science requires integrating AI into daily work processes, rather than isolating it in specialized teams. By sharing insights from DNB’s Data Science Hub and cloud-first strategy, the authors provide guidance for other public and financial organizations looking to adopt similar approaches. Read more here.
International Association of Insurance Supervisors (IAIS) consults on draft application paper focused on the supervision of AI. The adoption of AI in insurance offers benefits like cost reduction and better risk management, but also poses risks such as bias and accountability challenges. To address these concerns and maintain trust, the IAIS aims to guide supervisors in applying existing Insurance Core Principles (ICPs) to oversee AI in the sector. The paper highlights the importance of governance, transparency, fairness, and insurers’ responsibility for managing AI systems, including those from third-party providers. Feedback on the draft is invited by 17 February 2025, along with suggestions for further IAIS work on AI. Read more here.
Global non-bank financial intermediation (NBFI) sector sees robust growth in 2023, outpacing traditional banking. The latest Global Monitoring Report on NBFI by the Financial Stability Board (FSB) reveals significant growth in the sector, with a notable 8.5% increase in 2023 — more than double the 3.3% growth rate of the banking sector. This expansion has propelled the NBFI’s share of global financial assets to 49.1%, driven largely by higher valuations of market-based instruments and strong investor inflows. The report highlights increased asset growth across nearly all NBFI subsectors, with money market funds benefiting from higher yields amid global banking turmoil. Notably, the sector’s assets in credit intermediation activities reached an all-time high of USD 70.2 trillion, signaling continued market resilience and increasing financial leverage risks. Read more here.
New report by the FSB proposes key recommendations to enhance data alignment and interoperability for cross-border payments. The report, which incorporates feedback from consultations, addresses critical challenges related to the cost, speed, transparency, and accessibility of international money transfers. It emphasises the need to balance regulatory requirements — such as anti-money laundering (AML), combating the financing of terrorism (CFT), and data privacy — while reducing friction in data flow across borders. To ensure coordinated implementation, the FSB plans to establish a forum involving key public sector stakeholders to guide these efforts forward. Read more here.
A new call for papers invites scholars, policymakers, and practitioners to explore emerging approaches to AI governance and regulation from a comparative perspective. The initiative encourages submissions focusing on AI regulatory frameworks in different jurisdictions, including comparative analyses across countries and the impact of international efforts on national strategies. Papers are welcomed from a variety of disciplines, such as legal analysis, qualitative studies, computational social science, and economics. The goal is to identify the challenges and opportunities faced by different nations in shaping AI governance, with special attention to strategies in emerging economies and the influence of global frameworks on local regulatory approaches. Read more here.
The World Bank is accepting applications for the 2025 Government Analytics Fellowship, offering a unique opportunity to enhance public administration through data-informed decision-making. The Fellowship, which runs for six months, combines in-person training and expert support from World Bank specialists and University College London. Participants will develop a Government Analytics project while gaining insights from the Government Analytics Handbook and cutting-edge research. The program aims to equip government officials with the skills to leverage data for smarter policy development and drive systemic changes within their administrations. Applications are due by January 10, 2025. Read more here.
The 2023 OECD/IDB Digital Government Index reveals key insights into the digital transformation of the public sector in Latin America and the Caribbean. The report evaluates the efforts of 23 governments in the region to lay the groundwork for a human-centered digital transformation. While the findings show that Latin American and Caribbean countries are moving in the right direction, progress remains uneven. The report highlights that substantial efforts are still needed to fully leverage the benefits of digital transformation while addressing potential risks. Read more here.
Events
Network for Greening the Financial System (NGFS) scenarios phase v launch event. In November 2024, the NGFS launched the fifth edition of its long-term climate macro-financial scenarios, which assess climate risks under various assumptions. The updated scenarios incorporate the latest economic, population trends, and country-level climate commitments up to March 2024. A key update is a new damage function that results in a more severe assessment of economic losses from climate change. Read more and watch here.