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The Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) has launched an initiative to encourage the development of Smart Regulatory Technology (RegTech) tools and help Artificial Intelligence (AI) enable the regulatory environment and understanding.
Hosted in the ADGM GitHub repository, the Open Regulation (OpenReg) initiative provides a training platform where industry experts, regtech companies and the data science community can access FSRA’s AI models, data and research to create AI-enabled regulation technology tools.
Financial services firms are increasingly relying on artificial intelligence applications and machine learning techniques in their daily processes and decision-making. One area that may be difficult to automate is regulatory compliance, as it can be highly cognitive and contextual. Any incomplete information or misunderstanding of the rules could lead to inappropriate business decisions, improper risk management and controls, or possible violations.
Companies are understandably reluctant to deploy AI for regulatory compliance, relying on in-house or outsourced experts to ensure compliance through manual processes. This creates inefficiencies and increases regulatory costs.
Without a regulatory environment, the potential of AI applications to help financial services firms navigate the regulatory environment will be limited. In this regard, OpenReg provides the regulatory environment companies need to develop their own AI solutions.
The OpenReg program builds on FSRA’s earlier ‘Digital Regulation’ project, offering interested stakeholders the opportunity to join us in the further development of this important RegTech innovation.
FSRA and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) are also collaborating to leverage OpenReg and the university’s deep AI expertise to accelerate the adoption of AI in financial regulation. A particular area of interest involves developing programmable compliance in smart contracts to harness the potential of decentralized finance.
Emmanuel Givanakis, CEO of ADGM FSRA, said: “This is the first attempt by a regulator to provide a regulatory environment in the form of machine-readable regulations and artificial intelligence models. We are seeking to build smarter artificial intelligence and regulatory technology solutions to make financial supervision simpler, clearer and more effective.”
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