IMF Working Papers

This paper discusses the imperative for financial supervisory authorities to enhance their toolkit through the adoption of Artificial Intelligence in response to the growing digitalization of financial services. It aims to assist authorities in safely and effectively overseeing applications of Artificial Intelligence in the financial sector by proposing a tailored project management methodology for implementation of Artificial Intelligence by financial supervisory authorities that address unique risks and align initiatives with strategic goals. Key challenges, including ensuring explainability and mitigating bias, with a focus on stakeholder collaboration, are emphasized, alongside prerequisites for successful deployment, such as robust governance frameworks and adequate resources.