ADGM and MBZUAI signed an MoU to develop AI-based technological tools that will leverage AI to generate insights and information from financial regulations and rules, that can be fed into regulatory decisions and processes.
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) and Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) have signed a Memorandum of Understanding (MoU), focused on advancing the role of artificial intelligence (AI) to better achieve regulatory outcomes within the financial services sector.
By combining FSRA’s regulatory knowledge with MBZUAI’s expertise in AI, the partnership aims to develop cutting-edge regulatory technology (regtech) and supervisory technology (suptech) that provide reliable solutions for enhancing regulatory compliance and operational efficiency in the delivery of financial services.
At the core of this collaboration is a multi-step approach focused on training an AI algorithmic model to extract meaning and context from financial regulations and rules. The regulatory information from the AI model can be used by financial services firms to improve or automate their decision-making processes in relation to regulatory compliance.
A pivotal suptech solution undergoing enhancement is the FSRA’s ‘Risk Analyser.’ Currently in its pilot phase, this platform utilizes AI to analyze extensive documentation associated with a supervised firm, providing targeted insights to FSRA supervisors. These insights aid in the FSRA’s evaluation and decision-making pertaining to various risk domains encompassing business operations, governance and oversight, financial stability, as well as anti-money laundering and financial crime.
The upcoming phase involves the introduction of an industry-facing version of the ‘Risk Analyser,’ aimed at enabling financial firms to either craft their regulatory submissions or evaluate their adherence to FSRA regulations and standards.
By sharing such regtech and suptech solutions on FSRA’s Digital Lab, the partnership aims to empower the financial industry with tools and resources to fulfil their regulatory obligations in a more efficient and effective manner. This collaboration is especially important given the UAE’s position as an emerging hub for fintech. The MoU also enables MBZUAI’s faculty and students to deploy their AI skills and expertise in the specific areas of finance and compliance.”
