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As the landscape of the global financial system evolves with increasing complexity and digitalization, financial regulators face significant pressure to adapt. The collaboration between central banks and technology firms represents an emerging trend aimed at enhancing the effectiveness of financial oversight. This partnership is particularly critical as the financial sector integrates advanced technologies such as artificial intelligence (AI) and machine learning (ML), which introduce new challenges for both institutions and consumers.
Financial authorities play a crucial role in maintaining market integrity and protecting consumers. While AI tools can streamline processes in areas like lending, they also risk perpetuating existing biases and generating inconsistent outcomes in fluctuating markets. Therefore, it is imperative for central banks and regulatory bodies to modernize their oversight practices by adopting supervisory technology (suptech).
Advancements in supervisory technology
The adoption of suptech has accelerated globally, driven by the need for regulators to enhance their oversight capabilities. The State of SupTech Report 2025 indicates that 197 financial authorities in 140 nations have implemented at least one suptech solution, a substantial increase from 54 authorities noted in 2025. This shift reflects a commitment to proactive rather than reactive supervision, enabling regulators to detect systemic risks and respond effectively to emerging challenges.
Suptech tools encompass various applications, from predictive analytics for assessing climate-related risks to AI-driven analyses of consumer feedback. Notably, these technological advancements extend beyond developed nations; emerging markets and developing economies (EMDEs) are also harnessing the potential of suptech. By focusing on foundational access to markets and operational efficiency, these regions narrow the gap with their more developed counterparts.
Public-private collaboration in suptech implementation
One significant initiative fostering the integration of suptech is the Public-Private Secondments for SupTech Innovation (PPSSI). This initiative, jointly led by the World Economic Forum and the University of Cambridge SupTech Lab, pairs industry experts with financial supervisors to develop impactful suptech projects. These short-term engagements enable professionals from the private sector to apply their knowledge to public-sector challenges, addressing resource constraints faced by many regulatory bodies.
For instance, a central bank in the Middle East is exploring the implementation of AI to streamline the processing of consumer complaints. Traditionally, these complaints arrive in various unstructured formats, making manual processing labor-intensive and inconsistent. By collaborating with Abhi, a fintech company from Pakistan, the central bank is developing an AI system capable of interpreting and structuring consumer complaints efficiently. This innovation allows complaints submitted in Arabic or English, including scanned images and handwritten notes, to be processed swiftly and accurately.
Enhancing operational efficiency through technology
The AI system being tested at the central bank is designed to extract essential information from complaints and generate concise summaries, significantly improving operational efficiency. By utilizing open-source components, the central bank ensures secure deployment while enhancing the capabilities of its supervision and IT teams. As stated by Ejaz Anwer, Senior Vice President of Abhi, democratizing access to advanced AI enables developers to create localized solutions that transform raw data into actionable insights.
Meanwhile, the Financial Regulatory Commission of Mongolia is benefiting from suptech tools through a partnership with Regnology, a regulatory reporting technology firm. This collaboration began with an assessment of FRC Mongolia’s supervisory processes to identify areas where technology could enhance oversight. The findings revealed numerous challenges, including a reliance on manual procedures and limited data quality checks.
Strategic planning for suptech adoption
In response, Regnology has crafted a detailed suptech roadmap that outlines a strategic approach for integrating new technologies into supervisory workflows. This structured plan will help FRC Mongolia prioritize automation in data reporting, ultimately improving efficiency and reducing errors. As Batchimeg Batbold, Director of the Sandbox Unit at FRC Mongolia, notes, having a clear roadmap enables them to effectively identify priorities and modernize their processes according to their available resources.
By harnessing the power of suptech, financial regulators can better safeguard consumers and promote stability within the financial system. Continued investment in technological advancements and collaborative efforts between public and private sectors are crucial as financial authorities strive to keep pace with rapid changes and enhance both consumer protection and economic stability. These initiatives are essential in driving the evolution of suptech and shaping the future of financial supervision worldwide.