World’s central bank invites innovators to develop next-gen green finance tech

BIS Sustainable Finance

The Bank for International Settlements (BIS), the ‘bank of central banks’, is hoping to unearth the next generation of ‘green finance’ technologies, resolving a number of critical operational problems challenging sustainable finance practices today.

The second-ever G20 TechSprint Initiative, launched as part of the BIS’s dedicated Innovation Hub (BISIH), invites tech developers, fintechs, and data scientists to build “innovative technology solutions” to resolve outstanding issues in ‘green’ and sustainable finance.

Participants can choose to address one of three sustainable finance problem areas: information asymmetry in collecting and sharing environmental data, particularly to support environmental risk analysis (ERA); risk modelling, developing new data analytics tools that enable FSIs and financial regulators to better visualise, predict, assess and monitor climate change and environmental risk; and building new tech-based pathways to help green-conscious investors connect with sustainable businesses and commercial projects.

An expert panel of adjudicators will seek “production-ready and deployable prototypes” for each of these three problem areas.

The green and sustainable finance movement is centred on ensuring adequate capital is allocated to economic projects that help to protect the environment and support sustainable development.

Locally, the Australian Sustainable Finance Initiative (ASFI), a cross-finance industry body promoting green and sustainable finance initiatives, has been among the chief advocates in aligning Australia’s financial system with the country’s commitment to the UN’s Sustainable Development Goals (SDGs) and the Paris Agreement, transitioning Australia’s economy to net zero emissions by 2050, whilst ensuring financial flows do not help to exceed a maximum 1.5/2°C climate change trajectory.

“This TechSprint shows how fintech innovation can help promote green and sustainable finance, which has advanced to the top of central banks’ priorities, said Benoît Cœuré, Head of the BIS Innovation Hub.

Prospective participants for the 2021 challenge are requested to submit their proposals through the TechSprint portal.

IBM Cloud will support participants in the prototype building process. Participation is free.

Applications for the 2021 TechSprint close on 31 May, with shortlisted teams to be announced on 14 June.

From here, applicants will be invited to showcase their prototypes in a workshop in August for feedback from national authorities and experts.

Winners will be announced in mid-October, with the three winning solutions to be awarded a 50,000 Euro cash prize.

Last year’s TechSprint Initiative sought to explore the use of new regulatory compliance (RegTech) and supervision (SupTech) technologies to resolve operational problems in compliance.

Four firms (among which included one joint venture) – FNA, a UK-based financial analytics firm, Tookitaki, a Singapore-based cloud AML software developer, and the joint team of ISDA and REGnosys – took home gongs for developing unique solutions for dynamic information sharing, monitoring and surveillance, and regulatory reporting.

An independent expert panel, organised and sponsored by the Bank of Italy (featured as part of Italy’s current presidency of Group of 20), will judge the submissions and identify the most promising solutions.

Applicants for the G20 TechSprint can apply through the Innovation Hub portal.