Increasingly, they turn to technology to support these objectives, but one question is often overlooked. Do financial authorities subject their own technological deployments to the same scrutiny they expect from the institutions they supervise?

One of the most rapidly expanding areas is the oversight of AI use by banks, fintechs, insurance providers and other regulated firms. According to the State of SupTech Report 2025, currently 37% of financial authorities are deploying or developing tools to validate models, assess explainability, and detect bias and discrimination in the AI systems used by the entities they supervise. This reflects growing recognition that unchecked automated decisions affecting access to credit or insurance can entrench inequality.

By contrast, the absence of robust AI governance and ethical frameworks within financial authorities themselves is striking. More than two-thirds of the world’s financial authorities are exploring or have already deployed AI to strengthen supervisory functions, but more than half of them are doing so without AI governance or ethical frameworks in place. What’s even more concerning is that less than 9% of authorities identify ethical concerns, unintended societal impacts, algorithmic bias or discrimination as considerable risks in their AI deployments.

These figures are alarmingly low, especially as AI becomes more embedded across systems shaping how authorities pursue public policy objectives.

For example, financial authorities are in exploratory stages to address climate-related risks through a growing range of AI-enabled use cases. While obtaining reliable climate data and operating with non-standardised ESG metrics remain challenging, they monitor developments in sustainable finance markets, assess greenwashing risk by detecting inconsistencies between ESG claims and underlying business models, investments or activities, and track illicit financial flows related to illegal deforestation and wildlife trafficking.

At the same time, the digital infrastructure underpinning these activities carries its own environmental costs. As financial authorities scale their use of AI, demand for cloud computing and data centres is increasing, driving up energy and water consumption and raising difficult questions about sustainability and equity.

A social perspective reveals parallel challenges.

Financial authorities play a huge role in advancing consumer protection and financial inclusion. They facilitate consumer complaint resolution, detect predatory pricing, identify patterns of disproportionate harm to specific groups, analyse financial access gaps and assess the effectiveness of financial education campaigns.

Yet these efforts are often constrained by institutional blind spots. Currently, only 11% of financial authorities have an operational strategy or roadmap related to gender equality or gender-responsive supervision, including limited collection and use of sex-disaggregated data. This is mirrored in leadership, where women remain significantly underrepresented despite growing evidence that diversity strengthens decision-making. In 2026, women accounted for just 19% of central bank governors and less than a third of the top 20% of earners in central banks.

These examples only scratch the surface. Governance and inclusion gaps are becoming more consequential as financial authorities expand their use of emerging technologies to address a growing range of priorities.

Going forward, two questions stand out.

The first is how we ensure technology remains a means to an end, instead of an end in itself. Most authorities report supervisory technology benefits in terms of efficiency and analytical capability, but far fewer point to real-world outcomes, such as reaching more financial consumers. If financial supervision is to fulfil its mandates, innovation must ultimately be judged by whether it expands opportunity, reduces harm and strengthens public trust. How do we measure that digital oversight delivers tangible benefits for the communities these institutions exist to serve?

The second concerns growing dependence on dominant technology providers. Supervisors monitor financial institutions’ reliance on critical platforms like cloud services, yet increasingly depend on the same providers for their own operations. This means that those responsible for overseeing concentration risk are themselves becoming dependent on the very ecosystems they scrutinise. At the same time, discussions around digital sovereignty need to expand beyond reducing geopolitical and infrastructural dependencies. They must consider whether communities have meaningful agency in shaping technological futures, share in their benefits and not be left to bear the costs when governance fails. How do we ensure that digital innovation strengthens public value and democratic accountability, instead of reinforcing existing concentrations of power?

If technology is to help build more resilient, inclusive and sustainable financial systems, we urgently need answers to these questions.

Related readings by the author:

• State of SupTech Report 2025: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5903962
• Article: Financial regulators need to build ethics into their AI systems - American Banker
• Article: Suptech, Culture & Ethics - Starling Trust
• Article: How financial regulators are using technology to protect consumers and strengthen the financial system -
• World Economic Forum
• Article: How better data practices are shaping the next phase of financial supervision - World Economic Forum
• Article: Key takeaways on scaling, governance and future readiness: What I learned leading SupTech Week 2025 - GovSpace

Elisabeth Anna Resch is the Director of Partnerships at the University of Cambridge SupTech Lab and Digital Transformation Solutions - with the mission to accelerate the public sector’s digital transformation to build more resilient, inclusive and sustainable economies. She initiated global initiatives such as SupTech Week, innovation fellowships, and public-private secondment programs.

With over a decade of experience at the United Nations Global Compact and the World Bank, Elisabeth has mobilized multi-stakeholder partnerships and leadership initiatives that champion women’s empowerment, responsible innovation and social accountability across sectors. In 2015, Elisabeth contributed to the adoption of the Sustainable Development Goals while working at the Executive Office of the UN Secretary-General.