In a research brief published this month, CGAP, an independent think tank housed at the World Bank, examines how financial sector authorities in emerging markets and developing economies (EMDEs) can adopt AI-powered SupTech to advance financial inclusion.
The brief, authored by CGAP Senior Financial Sector Specialists Denise Dias and Juan Carlos Izaguirre, frames the analysis around a significant adoption gap. According to the Cambridge SupTech Lab’s State of SupTech Report 2025, 85 percent of financial sector authorities in advanced economies reported using SupTech, compared with 53 percent in EMDEs. Thirty percent of surveyed EMDE authorities are now piloting or deploying AI-powered tools on a limited basis, up from 17 percent in 2024, and the use of generative AI more than doubled between 2023 and 2025.
The brief identifies three mutually reinforcing advantages for authorities that adopt these tools: operational efficiency, broader analytical reach, and augmented decision-making. These tools can advance financial inclusion both directly, through richer monitoring of inclusion and financial health, and indirectly, by lowering compliance costs for providers and building consumer trust. Adoption also carries risks of its own, the authors note, including governance and accountability gaps, automation bias, cybersecurity exposure, and vendor lock-in and concentration.
Dias and Izaguirre argue that effective adoption “is not merely an IT issue” but demands fundamental cultural shifts within supervisory authorities, including breaking down departmental silos, fostering openness to responsible experimentation, and developing workforce strategies that pair supervisory expertise with AI proficiency. Many authorities' cultures remain unconducive to innovation, they observe, marked by data silos, resistance to change, and limited top management support.
CGAP closes with five recommendations: strengthen legal foundations for data protection and ethical AI use, pursue an ambitious but realistic digital transformation agenda, enhance AI risk management, transform organizational culture, and leverage domestic and international collaboration. Absent adoption, the authors warn, the capability gap between supervisors and the AI-driven firms they oversee may erode supervisory effectiveness.
“[T]he objective should not be merely to use AI-powered SupTech, but to leverage it to foster a more inclusive and responsible financial system that meets the needs of all consumers and promotes financial health,” they conclude.
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