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AI for Risk-Based Supervision: Another Nice to Have Tool or a Game-Changer

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dc.contributor.authorDohotaru, Matei
dc.contributor.authorPrisacaru, Marin
dc.contributor.authorShin, Ji Ho
dc.contributor.authorPalta, Yasemin
dc.date.accessioned2025-02-27T19:06:36Z
dc.date.available2025-02-27T19:06:36Z
dc.date.issued2025-02-27
dc.description.abstractRegardless of the individual perspectives on Artificial Intelligence (AI), it can transform the personal and professional lives at an unprecedented pace. It will also impact one of the most regulated and supervised industries in the world - the financial sector. Risk-based supervision (RBS) has been the gold standard for financial sector supervision over the past two decades, promising to aid supervisors in fulfilling their extensive and constantly growing responsibilities with limited resources. The remarkable advancement of AI in recent years, both in terms of performance and accessibility, promises to revolutionize numerous industries, including the financial sector. The benefits of AI for financial sector supervision extend beyond the automation of some manual activities. Moreover, AI can enable supervisors to undertake processes that were previously considered too time-consuming or and impossible to perform at the previous stage of technological development. Recognizing that the financial sector and its regulatory bodies are inevitably part of this ongoing evolution, the authors set out in this paper to examine the tangible impact of AI on the financial sector, with a particular focus on the supervisory perspective and the transition to an effective RBS regime. The authors also attempted to forecast the medium- and long-term implications of AI on the roles and responsibilities of the financial sector supervisor. This exploration seeks to enhance our understanding of how AI is influencing the financial landscape and its implications for future regulatory practices.en
dc.identifierhttp://documents.worldbank.org/curated/en/099021725190042788
dc.identifier.doi10.1596/42874
dc.identifier.urihttps://hdl.handle.net/10986/42874
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesProsperity Insight Series
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.subjectECONOMIC GROWTH
dc.subjectARTIFICIAL INTELLIGENCE (AI)
dc.subjectFINANCIAL SECTOR
dc.subjectRISK-BASED SUPERVISION (RBS)
dc.subjectTECHNOLOGICAL DEVELOPMENT
dc.titleAI for Risk-Based Supervisionen
dc.title.subtitleAnother Nice to Have Tool or a Game-Changeren
dc.typeReport
dspace.entity.typePublication
okr.date.disclosure2025-02-27
okr.date.doiregistration2025-04-14T11:56:23.442832Z
okr.date.lastmodified2025-02-21T23:05:21Zen
okr.doctypeReport
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099021725190042788
okr.guid099021725190042788
okr.identifier.docmidP503970-2c607262-8673-4797-b5a6-52df7187e543
okr.identifier.externaldocumentum34457376
okr.identifier.internaldocumentum34457376
okr.identifier.report197427
okr.import.id6718
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099021725190042788/pdf/P503970-2c607262-8673-4797-b5a6-52df7187e543.pdfen
okr.region.geographicalWorld
okr.sectorFY17 - Banking Institutions
okr.sectorFY17 - Financial Sector
okr.themeFY17 - Financial Infrastructure and Access,FY17 - Financial Sector oversight and policy/banking regulation & restructuring,FY17 - Climate change,FY17 - Financial Stability,FY17 - Adaptation,FY17 - Financial inclusion,FY17 - Credit Infrastructure
okr.themeFY17 - Environment and Natural Resource Management,FY17 - Finance
okr.topicFinance and Financial Sector Development::Finance and Development
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicInformation and Communication Technologies::Information Technology
okr.topicScience and Technology Development::Technology Innovation
okr.unitProsperity-FCI-FinStab&Integr (EFNFS)
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