Leveraging AI and data analytics in financial regulation

Posted on May 25, 2024 by Editor

Earlier this month, Commissioner Jaime Lizárraga addressed the Eleventh Annual Conference on Financial Market Regulation in Washington D.C., emphasising the importance of economic analysis in the work of the US Securities and Exchange Commission (SEC). His remarks highlighted the diverse needs of investors and the role of innovative approaches – such as AI data analytics – in enhancing regulatory effectiveness.

Commissioner Lizárraga underscored the significance of economic analysis in rulemaking, enforcement, and investor protection. He pointed out that incorporating innovative AI, machine learning, and data analytics can improve the SEC’s understanding of market dynamics and the impacts of regulatory measures. He noted that the SEC’s Division of Economic and Risk Analysis (DERA) is already leading initiatives to integrate cutting-edge data analytics powered by AI.

As AI becomes increasingly prevalent in the financial analysis world, we expect to see more regulators like the SEC experimenting with AI powered data analytics. With vast banks of structured data to play with, we’re interested to see the innovations in regulation and analysis that such technologies can drive.

Our own Revathy Ramanan will be speaking at the XBRL Europe conference this morning, outlining just some of the ways that regulators can gain new insights and comprehensive coverage over issuers’ filings through the use of LLMs.

To delve deeper into Commissioner Lizárraga’s insights on financial market regulation, read the full speech here.

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