The financial services regulatory authority (FSRA) of Abu Dhabi Global Market (ADGM) taps into the power of artificial intelligence (AI) with its latest development of open regtech initiatives.
ADGM is exploring the use of AI within a regulatory context in a bid to unlock its intelligent compliance potential.
Hosted in the ADGM GitHub repository, the open regulation (openreg) initiative provides a ‘training ground’ for creating AI-enabled regtech tools. Participants will be equipt with access to FSRA’s AI models, data and research.
The announcement comes as financial services firms are becoming increasingly aware of AI applications and machine-learning techniques. Typical applications include day-to-day processes and decision-making.
Being highly cognitive and contextual, regulatory compliance is a difficult area to automate. Any incomplete information or misinterpretation of a rule could lead to inappropriate business decisions. Inaccuracy also puts a firm at risk of improper management and regulatory breaches.
Legacy systems, manual processes and outsourcing have long been drivers of such inefficiency and often generate increased regulatory costs. Yet a lack of regulatory context limits the potential of AI applications to guide firms through the regulatory landscape.
In this regard, ADGM’s openreg provides the regulatory context required by firms to develop their own AI solutions. The initiative builds upon FSRA’s earlier digital regulation project, which encouraged stakeholder participation.
Accordingly, the FSRA invites the industry, regtech companies and data science community to participate in the AI training ground to build AI-enabled compliance solutions.
Deployment
In conjunction, the FSRA is collaborating with the Mohamed Bin Zayed University of Artificial Intelligence (MBZUAI) to accelerate the adoption of AI in financial regulation.
One specific area of interest relates to the development of programmable compliance in smart contracts to harness the potential of decentralised finance (DeFi).
“This is the first time a regulator has tried to provide regulatory context in the form of machine-readable regulations and AI models,” Emmanuel Givanakis, CEO of the ADGM FSRA says.
The initiative consolidates developers and provides access to the underlying data ADGM uses to create its own AI model.
In this way, it aims to build “smarter AI regtech solutions that make financial regulation more effective,” concludes Givanakis.
Image and article originally from thefintechtimes.com. Read the original article here.