Convergence in a Fragmented World: Shaping Stronger Financial Safety Nets Through Shared Principles, Innovation and Collaboration​

Opening remarks by Eva Hüpkes, IADI Secretary General, on the 24th IADI APRC Annual Meeting & International Conference 2026.

Distinguished colleagues,

It is wonderful to be back in Kuala Lumpur. Over the years, I have visited many times, and it is always a pleasure to return to a city where colleagues have become friends. My thanks to PIDM — to Rafiz, Afiza, and their team — for their exceptional hospitality. The programme you have designed around the theme “Convergence in a Fragmented World” promises to be insightful and engaging, with its many interactive elements.

Given the focus on technology and financial innovation, I would like to speak about the impact — the opportunities technology creates and the risks it poses to the deposit insurance community.

The core idea of deposit insurance has remained consistent over the decades: retail depositors will not lose their funds if their bank fails. However, the way this promise is delivered is evolving. Technology is reshaping the operations of deposit insurers, while innovation is redefining what counts as a deposit, who qualifies as a deposit-taker, and how quickly depositors can decide to move their money. Let me address each of these changes in turn.

Products: The Expanding Perimeter

First, financial innovation and digitalisation are expanding the boundaries of what looks like a deposit and what functions like one. Some new products may fall within the deposit insurance perimeter, some remain outside it, and others occupy ambiguous territory. The question is: is there a clear line between what is insured and what is not?

The recently updated IADI Core Principles allow for a broader conceptual perimeter by shifting from an institutional to a functional approach. They define deposit takers by what they do rather than by what they are called. Previously, the scope was limited to banks taking deposits. Now, it covers all insured deposit-taking institutions — entities authorised to accept deposits and subject to prudential regulation, supervision, and resolution regimes. This functional approach includes institutions that are not strictly banks, such as cooperatives. It may also extend, where the policy rationale supports it, to non-bank entities offering deposit-like products, provided they are subject to adequate regulation and supervision.

The framework is now in place, but the real challenge lies in its practical application to specific products within specific jurisdictions clearly distinguishing between products that are to be treated as insured deposits and those that are not. Moreover, clear communication regarding what is protected and how protection operates is core to public confidence in the safety net.

Actors: The Digital Depositor and Digital Intermediation

Second, financial innovation and digitalisation are reshaping the actors involved in the deposit relationship, both on the depositor and intermediation sides.

On the depositor side, digital depositors are faster, more informed, and highly mobile. Fast-payment systems now operate in over 100 jurisdictions. Brazil’s PIX system, for instance, reached 90% of the adult population within five years. The same infrastructure that enables instant fund transfers can also amplify the speed of withdrawals, sometimes triggered by a single social media post. While technology does not cause bank runs, it accelerates their pace when they occur.

On the intermediation side, banking-as-a-service platforms, deposit-placement services, embedded-finance providers, and BigTech entrants are reshaping how deposits reach insured institutions. Some intermediaries bring depositors safely within the insurance perimeter, others bring them to its edge, and some leave them outside it — often without their knowledge.

This lack of transparency leaves depositors vulnerable, particularly in moments of stress., and raises questions about whether and how  current frameworks  need to adapt.

Operations: Opportunities and Responsibilities

Third, financial innovation and digitalisation is transforming the operations of deposit insurers. Tools like automation, artificial intelligence, cloud computing, and — in the future — quantum computing offer immense potential for risk assessment, depositor reimbursement, and resolution planning. However, they also introduce risks, including concentration risk, model risk, third-party dependencies, and cyber vulnerabilities.

Technological tools can help move us from being paper-ready to crisis-ready. For example, automation can reduce reimbursement timelines from days to hours. Artificial intelligence can enhance early detection of stress, streamline claims processing, and improve fraud detection. However, that same technology can also become the source of the next operational failure.

The risks are real, and the standards architecture is beginning to address them. The 2025 IADI Core Principles introduced a new principle on Business Continuity Management, requiring deposit insurers to maintain robust frameworks to withstand operational and cyber disruptions, including third-party failures.

A recent development highlights the urgency. Last month, Anthropic disclosed the existence of a frontier AI model, Claude Mythos Preview, capable of autonomously identifying and exploiting software vulnerabilities at an unprecedented scale. While the model has not been publicly released, its implications are profound. The financial-policy community responded immediately, with the topic featuring prominently at the IMF and World Bank spring meetings. This episode underscores the rapid advancements in technology and the lag in public policy’s ability to respond.

The Path Forward: Products, Actors, and Operations

These three propositions — products, actors, and operations — form the foundation of the IADI Report on the Impact of Financial Innovation and Digitalisation on Deposit Insurance Systems. Published for consultation earlier this year, the report will be finalised at our EXCO meeting in June.

The report outlines the digitalisation agenda for the deposit insurance community. The Core Principles provide the framework, while the Digitalisation Report identifies the open questions that will shape its implementation. Together, they also set the stage for our discussions over the next two days.

Conclusion

Let me close with two thoughts:

First, the technology agenda for deposit insurance is fundamentally an opportunity. The tools available to us today are far more advanced than those available to the architects of the current system. Used wisely, they can enable us to deliver on the deposit insurance promise faster and more reliably than ever before.

Second, the 2025 IADI Core Principles revision has laid the groundwork for this progress. The revision was guided by four key objectives: adopting a holistic view of the financial safety net with deposit insurance as an integrated component; addressing interactions with resolution frameworks; introducing aspirational elements alongside baseline criteria; and future-proofing the principles against technological and environmental changes. The first panel later this morning will delve deeper into these changes.

Thank you, Rafiz, Afiza, and PIDM, for hosting us. And thank you all for being here.[1]

[1] I am grateful to Juan Carlos Lopez, Bert van Roosebeke and Nan Zhou for their comments.

References

• FSB, Depositor Behaviour and Interest Rate and Liquidity Risks in the Financial System (October 2024); IADI Digital Posts §2.2.
• Frost, Jon, Jermy Prenio, Vatsala Shreeti, and David Symington. “Digitalisation and Innovation – Opportunities and Risks for Financial Health.” FSI Briefs No. 31. Financial Stability Institute, April 2026.
• IADI, Core Principles for Effective Deposit Insurance Systems (September 2025; published November 2025).
• IADI, Report on the Impact of Financial Innovation and Digitalisation on Deposit Insurance Systems (consultative document, January 2026)