Artificial intelligence (AI) is revolutionizing financial markets and supervision, as highlighted at the Point Zero Forum. AI's impact on finance is significant, particularly due to its speed, data processing capabilities, and the trust it engenders. Three key areas are particularly noteworthy: speed, market structure, and governance.
AI compresses timeframes for market operations, such as price discovery and credit decisions, reducing them from minutes to milliseconds and days to seconds. However, this efficiency also narrows the window for error detection before it spreads.
The concentration of advanced AI models and computing power with a few providers poses a risk to systemic stability. If the industry relies heavily on these models for risk scoring or fraud detection, a single outage or flawed model could have widespread consequences.
Governance demands accountability and explainability in AI decision-making. Institutions must ensure that AI systems are transparent and that decisions can be traced back to human oversight.
Switzerland, particularly Zurich, has emerged as a global hub for AI, data science, and robotics. The country's universities and talent attract global industry leaders, and Switzerland will host the World AI Summit in 2027. FINMA, as an integrated supervisor, has conducted surveys on AI in the Swiss financial industry, revealing a highly dynamic sector with a growing adoption of AI across the entire value chain.
The industrialization of fraud, enabled by AI, presents new risks. According to Interpol's 2026 Global Financial Fraud Threat Assessment, AI-enhanced fraud is four-and-a-half times more profitable than traditional methods. SupTech, the use of technology for modernizing financial supervision, is crucial for understanding and mitigating these threats.
The International Organization of Securities Commissions (IOSCO) has launched a strategic initiative in SupTech, with FINMA chairing it. A recent IOSCO survey highlights the broad use cases of SupTech, ranging from automated document analysis to market abuse investigations and crypto monitoring. These use cases aim to enhance both efficiency and effectiveness in supervision.
Efficiency in SupTech involves faster and lower-cost processing of tasks, such as AI-assisted desk reviews for on-site inspections. Effectiveness, on the other hand, involves deeper insights and cognitive augmentation, such as AI-powered tools for detecting insider trading and monitoring crypto exposures.
Digital assets, including cryptocurrencies and stablecoins, are a growing focus for supervisors. The expanding token world, including the tokenization of securities and other real-world assets, requires coordinated efforts among global regulators to address the associated challenges and opportunities.
