What is Suptech and Why Will it Continue to Need Human Intelligence? Suptech refers to the adoption of innovative technology such as Artificial Intelligence and Machine Learning by regulators for supervision purposes.
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Everything functions smoothly until it doesn't. And that's exactly what happened when the Great Depression of 2008 hit the United States, and eventually, the world. Since then, financial regulatory bodies and institutions have been proactive in unforeseen situations.
This gave rise to supervisory technologies designated to monitor markets and oversee banks, brokerage firms and other financial institutions, called Suptech. Suptech has been developed and adopted by several global financial regulators including the US's FDIC and Federal Reserve, FCA and Bank of England in the UK and Africa's National Bank of Rwanda. Bank of International Settlements and the World Bank are also actively engaging in such applications.
Suptech refers to the adoption of innovative technology such as Artificial Intelligence and Machine Learning by regulators for supervision purposes.
This technology mainly caters to two primary aspects of financial supervision- data collection and data analysis. With AI making great strides in recent times and Generative AI coming into the picture, the Suptech applications will surely reduce its dependency on humans.
Prabhat Keshava, GM, DoS, NABARD feels that concluding possible events from analyzed data is a matter of sheer human intelligence and therefore, supervision will continue to require humans at the helm. "The question is the more you support them with technology, the individual will be able to spend in more qualitatively on these analysis," he shares.
In late 2020, the Reserve Bank of India also announced its decision to utilize the use of Suptech technologies for keeping track of its regulated entities.
Recent years have been cases sprouting when it comes to lack of compliance adherers. The cost of compliance tends to be very high but it's of utmost importance. The key is to identify non-compliance and to enforce the remedy. "The more we are technologically having solutions to identify or flag off that kind of noncompliance more quickly, the company will be able to fix it on their own, on their own right. Otherwise, if somebody else finds out that, you don't have that time to go ahead and fix it," shared Ravikumar Tatavarthy, Founder and Managing Director, Finakon Technologies. Suptech helps in quicker identification, in turn, reducing the cost of compliance. But in the end, it will rely on human behaviour to make change.
The idea of technology and the role of humans have changed and will continue to evolve. The two will go hand in hand to democratize a lot of capabilities that are very specialist right now.