Agenda

How will AI reshape the global financial system and central banking? What roles does the BIS play in supporting central banks through this journey? As AI adoption accelerates, proactive steps are essential to navigate the transformative impact on finance. This presentation outlines the BIS's strategic actions and collaborative work with central banks, including two impactful projects from the Innovation Hub: Project Gaia , which automates climate data extraction from corporate reports for more efficient climate risk analysis, and Project Spectrum, which leverages AI to organize retail data for more accurate inflation forecasting.

This presentation will discuss the skills, technology and processes required for a successful adoption of AI by central banks.

As central banks worldwide grapple with unprecedented challenges in economic stability and policy effectiveness, artificial intelligence has emerged as a critical tool to forecast trends, adapt to real-time market changes, and enhance policy precision. But alongside its potential, AI introduces significant ethical and governance complexities that must be addressed to ensure transparency, fairness, and accountability in the financial system. This keynote explores how AI can elevate the role of central banks, enabling them to act more swiftly and accurately while upholding the highest standards of ethical responsibility. Attendees will gain insights into practical frameworks for responsible AI deployment in central banking and explore real-world examples of how institutions are navigating this complex yet promising frontier. The session will leave industry leaders with actionable strategies to harness AI’s potential in policy-making without compromising public trust.

Chapter 3 of the IMF’s October 2024 Global Financial Stability Report assesses recent developments in AI and Generative AI and their implications for capital markets. AI may reduce some financial stability risks by enabling superior risk management, deepening market liquidity, and improving market monitoring by both participants and regulators. New risks may arise, including increased market speed and volatility under stress, more opacity and monitoring challenges of non-bank financial institutions, increased operational risks, and increased cyber and market manipulation risks. Additional policy responses should be considered for relevant authorities to be prepared for these potentially transformative changes.

Regulators require financial institutions to implement robust governance frameworks that ensure an ethical and safe use of AI. This presentation will cover how financial institutions should address AI risks and how AI needs to be regulated, introducing developments on AI regulation at the international as well as financial sector levels, covering GDPR, PSD2, the EU´s AI Act... among others.

This presentation will shed light on following subject matters:
1. Banque de France innovative approach to experience AI
2. Banque de France strategy
3. Banque de France flexible and project base organisation
4. Some case studies:
a) The « augmented  supervisor »
b) Analysis of the impact of monetary surprises on exchange rates using AI
c) Tracking of economic activity with satellite data
5. Cherry on the cake : Project for an « Economic Datascience Society »

This panel will explore progress in the adoption of AI within central banks, focusing on how these technologies are reshaping key functions such as research and supervision and enhancing staff productivity. Experts will share their experiences in piloting AI for real-world applications and the challenges of bringing these applications into production use. Additionally, the conversation will examine how central banks are integrating AI into their internal operational risk, governance and compliance frameworks, and how Responsible AI can be achieved in practice.

The rapid evolution of Artificial Intelligence (AI), especially generative AI, holds transformative potential for central banking. Central banks are closely monitoring AI's macroeconomic impacts, such as its effects on inflation, economic growth, and labor dynamics, which are critical to monetary policy. Additionally, AI is poised to influence financial stability by enhancing risk assessment but also introduces risks like operational vulnerabilities. Central banks are already leveraging AI in data analysis, economic modeling, and payment systems, while focusing on ethical concerns like transparency and data privacy. This presentation explores AI's benefits and risks, highlighting the importance of responsible adoption and collaboration.

Payments ecosystems are innovating at scale, moving towards a more instant and frictionless future - there is fragmentation with many forms of money and settlement mechanisms, yet a retained focus on harmonisation and interoperability, driving adoption of global standards like ISO 20022 in the world of payments. This is leading to more structured, richer data sets dupporting scalable innovation and more robust compliance controls. How does this richer data match up to developments in AI. Gen AI is maturing as per Gartner Hype Cycle but Composite AI represents the next phase in AI evolution. Pragmatic use cases for AI in payments are solving fundamental problems like real-time fraud/AML monitoring and there is an exciting future ahead, but we must proceed responsibly!

The pace of change in AI and emerging technologies offers tremendous opportunities, however is also becoming overwhelming. This presentation explores evolving developments and deployments of tech in financial services, and examines where public and private sector actors will need to focus their attention to effectively respond to the rapidly changing environment.

This presentation explores the growing influence of artificial intelligence (AI) in the financial sector, focusing on the risks and challenges it introduces, such as bias, regulatory compliance, cybersecurity threats, and transparency issues. It highlights the need for robust governance frameworks, ethical AI deployment, and collaboration between regulators and industry stakeholders. Attendees will also gain insights into regulatory or supervisory approaches in key jurisdictions to ensure AI adoption promotes innovation while safeguarding financial stability.

In the last decade, we have witnessed a significant development of AI-powered quantitative trading (QT), due to its instant and accurate order execution, and capability of analyzing and processing large amount of data related to the financial market. Traditional AI-powered QT methods discover trading opportunities based on either heuristic rules or financial prediction. However, due to the high volatility and noisy nature of financial market, their performance is not stable and highly reply on the market condition. Recently, reinforcement learning (RL) becomes an appealing approach for QT tasks owing to its stellar performance on solving complex decision-making problems. This talk will discuss some recent research progress in RL for QT and future directions.  More information is at http://trademaster.ai/ and https://github.com/TradeMaster-NTU/TradeMaster.

As AI is being integrated in the financial sector, we highlight its potential and current limitations. AI is mainly used in peripheral activities like customer service, with limited application in core financial processes due to regulatory concerns. The Dutch Central Bank (DNB) supervises AI usage, ensuring compliance with the European AI Act, which includes fundamental rights like privacy and non-discrimination. DNB encourages financial institutions to experiment with AI while maintaining transparency and regulatory compliance. We emphasize the importance of collaborationetween financial institutions and AI experts to fully realize ist potential.

This panel will explore how AI-driven innovations are reshaping the financial sector and the role of central banks in ensuring it is used responsibly. The discussion will examine the impact of AI on consumers and markets as well as the emerging risks. It will consider the current state of AI regulation and assess whether this is sufficient to ensure financial stability and consumer safety. The panel will share their thoughts on staying ahead in a rapidly evolving digital landscape and on what central banks can do together to ensure responsible AI adoption in the industry.

Online cash registers (OCR) have become a widespread tool in retail since their gradual introduction in 2013 in Hungary. The analysis and modeling of the data derived from them can play a crucial role in supporting important national economic decisions. The presentation explores the main processing and modeling steps that we performed in case of product name categorization, time series analysis and time series modeling with statistical and deep learning methods.

As central banks and financial regulators grapple with the rapid advancement of Artificial Intelligence (AI), understanding its potential and pitfalls becomes crucial. This presentation will explore how AI can revolutionize central banking, from enhancing operational efficiency to improving financial monitoring and risk management. We will delve into the opportunities AI presents for predictive analytics, fraud detection, and customer service innovation. However, the risks associated with AI, including ethical considerations, data privacy, and systemic vulnerabilities, will also be examined. Drawing on case studies, we will discuss the necessary measures central banks must adopt to harness AI's benefits while mitigating its risks, ensuring they fulfill their regulatory and supervisory duties.

The adoption of AI technologies, particularly generative AI, has continued to gather pace throughout 2024. This year has been one of learning for most organisations, as they experiment with AI, understand its capabilities and limitations, and address the challenges of reliable and responsible deployment. During this period, the technologies themselves have not remained static, with new capabilities continuously unveiled that push the boundaries of what is possible. So, what does the future hold? This presentation will bring attendees up to date with technological developments in AI, consider what we should expect over the coming year, and examine the implications for central banks and the financial sector more broadly.