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Partnership CSSF - SnT

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Veröffentlicht am Donnerstag, den 24. Oktober 2019

On 24 October 2019, the Commission de Surveillance du Secteur Financier (CSSF), and the University of Luxembourg’s Centre for Security, Reliability and Trust (SnT) officially signed, in the presence of the Minister of Finance, Pierre Gramegna, a partnership agreement that will contribute to position Luxembourg as a European centre of excellence and innovation in the field of artificial intelligence applied to state-of-the-art financial data processing techniques.

Increased need for security and reliability

As the supervisory authority of the financial sector, the CSSF faces mounting challenges. The civil society demands effective regulation of the financial centre, including minimising financial risks, whereas professionals of the finance industry ask for improved responsiveness. "Faced with these challenges, the CSSF has implemented its CSSF4.0 strategy. This will be a big step towards achieving close to real-time supervision" says Claude Marx, Managing Director, CSSF. As a part of this strategy, the CSSF will increase investment in agent training, review work processes, and make extensive use of new digital technologies, such as artificial intelligence, machine learning, and other tools commonly applied throughout the fintech sector. It is as a part of this CSSF4.0 strategy that the CSSF and SnT have begun their partnership.

“This research partnership provides us with a tremendous opportunity to leverage our expertise in Artificial Intelligence to help support our partner’s CSSF4.0 strategy. Working on concrete projects with companies ensures our research has an impact beyond the academic world, which is very rewarding” says Björn Ottersten, director of SnT. To date, the research centre has 14 partnerships in Fintech and most of them use some form of AI technology. SnT is actively involved in Luxembourg’s economy, collaborating with over 40 public and private partners in joint research projects. The resulting concepts present a genuine, long-lasting competitive advantage for companies in Luxembourg and beyond.

Pierre Gramegna, Minister of Finance comments: ”I welcome the partnership agreement that the CSSF and the SnT signed today to conduct joint research. By engaging in research on how to leverage new technologies such as AI in order to make the analysis and processing of fund documentation or regulatory reporting faster and more efficient, the CSSF not only underscores its openness to technological innovation, but will also contribute to further strengthening the competiveness of Luxembourg’s financial centre.”

Stéphane Pallage, rector of the University of Luxembourg, states: “We are very excited about this new partnership agreement. It is a perfect illustration of the University’s commitment towards the country and its financial industry.”

First collaboration: automating investment-fund documentation processing

The partnership will begin on 24 October 2019 and will last for a minimum of three years, renewable by tacit agreement. Its first project is "Automated Compliance Checking and Query Answering for Fund Documents". This project will use artificial intelligence to extract data from documents submitted to the CSSF by fund managers and to verify regulatory compliance.

"We recently passed the 40,000th prospectus processed mark, and 95% of that information is standardised. Through this project, we will be able to rapidly identify which passages need in-depth review, as well as which passages can be automatically approved. This will enable us to process the data more quickly, while simultaneously improving the quality of our analysis,” says Jean-Pierre Faber, member of the CSSF's Executive Committee.

To ensure the project’s success, the CSSF will provide experts in the field of investment funds and IT. The SnT will, in turn, contribute its expertise in the field of artificial intelligence.

Fund documents don’t differ much from other documents in one simple way: they are brimming with natural language. This means that there is a lot of nuance, which makes using machine analysis nearly impossible. That’s where AI comes into play: researchers will develop advanced techniques using Natural Language Processing and Machine Learning to ‘translate’ the contents of fund documents into something machines can read and review for compliance, completeness and consistency.

This is a truly interdisciplinary collaboration: “We’ll see individuals from the fields of applied AI, software verification and validation, and experts of the finance industry converge within the scope of this research project. The core of the project will be to develop advanced back-end technology that can process nuanced documents and provide insights to professionals at the CSSF about details that need expert attention” says Dr. Domenico Bianculli, a lead researcher on this project.