James Proudman: Cyborg supervision - the application of advanced analytics in prudential supervision

Speech by Mr James Proudman, Executive Director of UK Deposit Takers Supervision of the Bank of England, at a Workshop on research on bank supervision, London, 19 November 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I. INTRODUCTION

Recognising faces comes instinctively to humans. Until fairly recently, however, it proved beyond the ability of computers. Advances in artificial intelligence (AI) - the use of a machine to simulate human behaviour - and its subset, machine learning (ML) - in which a machine teaches itself to perform tasks - are now making facial recognition software much more widely available. You might even use it to access your bank account.

Because it is so easy for us but so hard for computers, facial recognition is a good illustration of the challenges faced in developing AI. Enabling a machine to teach itself to recognise a face requires sophisticated algorithms that can learn from data.