Artificial intelligence in suptech: the need for public sector adoption and adaptation

This is the first article in the series, "Artificial intelligence (AI) in financial supervision: Promises, pitfalls, and pragmatic approaches." It focuses on public sector adoption of AI. As the private sector continues to eagerly harness the potential of AI, it is increasingly imperative for public agencies — particularly financial regulatory and supervisory authorities as well as consumer protection and competition agencies — to consider AI as a component of digital transformation. Failure to do so would cause the public sector to fall behind in addressing new and newly magnified risks (including financial fraud and cyber threats) and evolving regulatory and supervisory challenges.