Suptech uptake drives consumer protection and financial inclusion

The Cambridge SupTech Lab, an initiative of the Cambridge Centre for Alternative Finance at Cambridge Judge Business School, University of Cambridge, finds the positive trend in the adoption of suptech continues amongst financial authorities, though most implementations remain largely in the early stages of a complete digital infrastructure.

Simone di Castri, a Co-Head of the Cambridge SupTech Lab, said, “The most impactful change we can make in financial services today is to accelerate the digital transformation of supervisory agencies worldwide. Advanced suptech solutions can help financial authorities manage the challenges presented by digitalisation, datafication, globalisation, and the diversification of business models. It can help them address pressing issues such as financial crime, fraud, exclusion, climate change enablers, consumer protection, and artificial intelligence biases. The results of our survey indicate that financial authorities are beginning to embrace the immense opportunities of suptech.”

5 key findings from the survey

The survey conducted by the Lab demonstrates early-stage advances in the adoption of suptech:

Surveyed financial authorities report the biggest impact of their suptech implementation is the speed with which they are able to respond to emerging risks and take supervisory action (76%). They also cite more efficient information flows between consumers and supervisors (65%). This enables better and more transparent data analysis and timely response to potential issues. Suptech initiatives are also having a positive impact on consumer outcomes (52%), leading to improved protection and increased confidence in financial markets.

The data is based on a survey of 64 financial authorities such as central banks, securities and capital market authorities, financial conduct authorities, and insurance supervisors from six continents, representing financial sector oversight for a significant population of approximatively 2 billion people.  The survey was conducted by the Lab between August and November 2023, and the findings are presented in the annual State of Suptech Report.

Thoughts from the SupTech Lab

Matt Grasser, Principal Technologist and a Co-Head of the Cambridge SupTech Lab, said, “Through the Lab, we endeavour to serve as a catalyst for the responsible integration of technologies, empowering public sector authorities to manage more effectively and efficiently some of the most pressing economic risks we face as a society. The diverse perspectives from the global supervisory community reflected in State of Suptech Report serve as the guiding force in shaping our research, training programs, and digital tools. This year’s report dives particularly deeply into the strategies and structures that dictate data flows within financial authorities, which necessarily inform how suptech solutions can be tailored and harmonised with existing supervisory processes. Such nuance is crucial in mindfully accelerating the next generation of underlying digital supervisory infrastructure for data collection, validation and storage, but moreover for deriving value from suptech solutions that leverage advanced techniques like natural language processing, machine learning, and even the emerging family of technologies under the banner of generative AI.”.