As part of the Financial Innovation Monitoring Strategy of the Financial Supervision Commission for the period 2021-2024, the FSC continues its commitment to develop and improve its supervisory activities together with other European regulators and actively seek harmonization of national regulatory frameworks and practices in the field of financial innovation, including the implementation of artificial intelligence models.

In this respect, guided by its principle of active communication and dialogue with supervised entities, the FSC undertook a study to identify key topics related to the benefits, challenges and development of AI. The aim is to analyse in more detail the innovation in question and outline the current and future direction of development through analysis, opinions and criticism.

A total of 106 supervised entities answered the questions. The most active are the insurance brokers – 81%, followed by the insurance companies – 16%.

The topics in the initiated discussion document were related to the trends in the development of AI, the benefits and disadvantages of implementation, as well as the challenges facing companies, namely: the investments they have to make and the level of service they have to offer. Last but not least, the opinion of the supervised entities was sought regarding their attitudes towards greater use of AI by the regulator, and the responses reflected a positive attitude towards the policy to support the implementation of AI by the supervisory authority.

The ambitious goals set by the FSC in the field of financial innovation require work in unison with the imposed European principles and according to the level of risk posed by the respective AI systems, requirements will be determined to meet the quantitative and qualitative data, human force involved in the process and approach of data validation, testing and documentation. The key to the introduction of an AI system will be clearly defined managerial responsibilities for the business process, the level of risk in outsourcing the service, ensuring impartiality of results, algorithms used in decision-making processes, eliminating opportunities for action related to legal violations.

The Chairman of the Financial Supervision Commission, Mr. Boyko Atanasov, expressed his gratitude for the commitment and high level of activity on the part of the participants in the study. He believes that the obtained results are extremely important for determining the current situation in the field of AI use and for outlining the framework in which to work effectively in integrating artificial intelligence and overcoming the challenges facing the non-banking financial sector in this regard.

The updated Financial Innovation Monitoring Strategy for the Period 2021-2024, published on the Financial Supervision Commission’s website, aims to establish a dialogue between the regulator and business, with a view to outlining possible future joint initiatives to integrate AI systems into the non-banking financial sector.