Representatives of the UKNF took part in the Investment Firms Forum held by the Chamber of Brokerage Houses. The Forum addressed, among others, digital transition in the capital market, the role of artificial intelligence in investments, and digital assets. The line-up of speakers included Prof. Dariusz Adamski, Deputy Chair of the KNF, who also took part in a fireside chat.

Zbigniew Wiliński, Director of the FinTech Department at the UKNF, took part in a discussion panel ‘Digital transition in the capital market: the impact of DLT and distributed technologies’, where he emphasised that for many years the UKNF had been supporting the technology development in the financial market with various initiatives, such as the Innovation Hub programme or the DLT Virtual Sandbox. The UKNF remains open to dialogue and cooperation and will be consistently supporting technology development in the financial market. The UKNF is also open to the market’s initiatives in the field of asset tokenisation, including in the investment funds market.

Mariusz Sienkiewicz, Director of the Regulated Data Analysis Centre at the UKNF, in the introduction to the discussion panel ‘The role of AI in fraud detection and market protection: how to secure compliance with regulations and approval from the supervisor’, said that the topic of the panel addressed an area which was central to modern supervision as well as to the security and stability of the financial market. He pointed to the role of AI in fraud detection, financial crime prevention, and digital resilience. He has stated that we can see, on the one hand, a rapid technological advancement as well as the development of AI and machine learning but, on the other hand, the growing scale of threats: more  sophisticated cyber attacks, increasingly popular forms of market manipulation, and complex money laundering schemes.

During the panel, he has explained that an organisation must understand the significance of data governance and quality-related roles. Speaking of requirements on model resilience, he named, for example, data care, the monitoring of model performance quality, model retraining when they no longer comply with proper performance criteria. He has clarified that we cannot prevent the use of models in darknet, and AI is used also by individuals who attempt to violate the principles of security and integrity.

Dorota Nowalińska, Deputy Director of the Investment Firms Department at the UKNF, took part in a discussion panel ‘Compliance: how to build strong supervisory structures in harmony with innovations?’, where she said that for investment firms, AI-based solutions would apply mostly to areas related to sales and customer service. Communication channels or applications which could be used to sell financial instruments may also rely on algorithms, which exploit behavioural techniques, research, and client mapping, and this makes certain products easier to sell. This could lull the client into a false belief that they have made the decision themselves. As the UKNF, we assume that innovative solutions may contribute to the development of the investment advisory service or, for example, a slightly forgotten portfolio management service.