Innovation Sandbox Programme: Advancing AI for Consumer Good

Central Bank of Ireland has developed an Innovation Sandbox Programme to support the development of innovative initiatives that promote better outcomes for the public and the financial system. Through the programme, we provide regulatory advice and support to firms on their innovative projects, in line with our public policy objectives.

The theme of our current Sandbox Programme is “Advancing AI for the Public Good”.

The programme operates on a cohort basis over six months, giving each participant time to develop their innovation

The programme encourages collaboration across the ecosystem, and programme outputs are documented and shared as learnings. It also aims to support the development of new products, services and business models that address the challenges identified in the theme, and to help firms bring responsible AI to market more quickly and more safely.

The Sandbox Programme framework for Advancing AI for the Public Good comprises:

▪      A structured programme of modules - participants engage in onsite and virtual module sessions on specific topics relevant to the theme. The topics are relevant to participants and tailored to their needs and requirements as far as possible

▪      Dedicated support - each participant works with a dedicated Sandbox Relationship Manager, who is their point of contact throughout the programme, and who liaises with a broad range of Central Bank subject matter experts to provide regulatory advice and support as necessary.

The methodology and delivery of this programme are subject to continual assessment and impact review.

No. AI Act Sandboxes are established under the EU Artificial Intelligence Act. More information on Ireland’s AI Act Sandbox can be found at the National AI Office of Ireland’s website.

1. Supporting Consumers in Vulnerable Circumstances

How can AI help identify and support consumers in vulnerable circumstances, without creating new forms of exclusion?

Vulnerability is dynamic, and the point at which a consumer most needs support is often the point at which they are least able to ask for it. AI could identify difficulty earlier and adapt how firms communicate. It could equally turn inference about circumstance into a basis for exclusion, or replace human contact when it matters most.

2. Fairness and Explainability in Automated Decisions

How can firms demonstrate that AI-driven decisions in financial services are fair and explainable and can be understood?

Creditworthiness assessment and life and health insurance pricing are high-risk uses under the AI Act. The Bank has been here before. The differential pricing review led to the prohibition on price walking in 2022. AI-driven personalisation raises the same question continuously, at speed, and with far less visibility.

3. Strengthening Consumer Resilience to Fraud and Scams

How can defences against fraud be strengthened as AI raises the sophistication of attacks?

Firm-side controls have improved considerably. The position of the consumer has not. A person can be persuaded to authorise a payment, coached to defeat a firm's own warnings, and convinced a message comes from their provider. A control the consumer can be talked around is not a control.

4. Accountability as AI Moves from Advising to Acting

Where does accountability sit as AI moves from advising to acting?

The line between a system that informs, one that gives regulated advice, and one that executes is becoming hard to identify. Agentic systems can initiate payments and delegate to other agents with limited oversight at the point of action, often outside any regulated relationship with the consumer.

The problem statements are intentionally broad. Central Bank of Ireland wants to draw on industry insight rather than prescribe a solution, and to see the range of approaches that firms bring forward. We expect firms who are keen to develop AI use cases that will help consumers, but who are unsure on how regulation applies to said use cases, to come to us with regulatory questions. Our hope is that this will help the firms develop the AI use cases for consumer good, while also helping the Central Bank to understand where regulation may need to evolve in response to AI.

The programme is open to applications from all sectors of the financial system, such as authorised incumbent firms, start-ups scaling innovation, fintechs seeking authorisation, technology businesses providing services to financial firms, and academic commercialisation projects. It is open to applications from standalone entities and from partnerships. The programme is focused on delivering outcomes to the public and may not be suitable for an innovation at a very early stage of development where, for example, a model has not yet been built. If in doubt, please contact us at sandbox@centralbank.ie to discuss the programme in further detail. We can also discuss whether our Innovation Hub may be better suited to your needs.

The sandbox is open to applications from standalone firms and from partnerships. After two sandbox programmes however, Central Bank of Ireland has observed that applicants who take a collaborative approach - whether by applying as partnerships or by clearly identifying who they need to collaborate with to develop their solution - yield good outcomes from the programme in terms of mutual learnings and uses cases that will benefit the public.

No. The Sandbox Programme does not provide any derogation or waiver from regulation to participants to engage in any testing of products with consumers, nor does it endorse any product, service or solution. When providing regulatory advice and support within the programme, we seek to adopt a proportionate, outcome-focused and risk-based approach.

Applicants do not have to be Irish domiciled. However, we do expect that applicants can clearly demonstrate an intention to operate in the Irish market.

Applications are sought from research projects focused on the commercialisation of research. Commercialisation is the process of turning research into an innovative commercial product or service. Ideally, applicants should be able to demonstrate that they have developed their solution in line with trial partners or customers.

We do not help participants to find partners to participate in the programme, nor do we match participants together for projects. It is for each applicant to consider whether it needs to partner with another party in order to participate.

We expect participants to dedicate sufficient time and resources to engage with the Central Bank in a meaningful and timely manner throughout the full six months of the programme. We recommend that participants attend each of the workshops. We expect a sufficient level of subject matter expertise from participants for information sharing and mutual learning.

The provision of regulatory advice and support gives participants an understanding of the regulatory frameworks applicable to their specific innovation, covering a broad range of domestic and European regulations, standards, guidelines and supervisory expectations.

This advice and support is not legal advice and is not a substitute for risk and compliance resources. It remains for each participant to determine how it will ensure compliance with relevant regulations, as applicable, and to demonstrate how it will meet regulatory standards and expectations.

The Central Bank can only give advice and support on the obligations within its mandate. Participants should be mindful of the laws applicable to them.

The selection criteria are tailored for each programme. Applications however will likely be assessed on the following selection criteria:

▪      Your project clearly addresses one of the four problem statements under Advancing AI for Consumer Good

▪      You can show what your project needs from the programme, and why regulatory advice and support at this stage is directly relevant to its development

▪      The business case for your project is developed enough to benefit from the programme, with early customer traction or validation with real potential customers, and you are ready to engage from the start

▪      You have the people, funding, data and technical resources to engage throughout the six months, and to take your project forward.

 

We will endeavour to take all necessary steps to protect IP and confidentiality for participants. Further detail on IP and confidentiality is provided in the Terms and Conditions.

Applicants selected to participate are listed on Central Bank of Ireland's website. Once a participant's name is published, it may reference that it is taking part in the Innovation Sandbox Programme, as long as it is made clear in all references that the Central Bank does not endorse the participant or its innovation. The use by participants of any crest, logo or mark of the Central Bank is prohibited.

Yes. At the end of each programme, the Central Bank publishes a report sharing key learnings, covering both the thematic learnings and the operation of the programme. In this way, the programme benefits not only the participants but the whole innovation ecosystem.

A selection panel comprising senior Central Bank staff will make the final selection decision.

Selected applicants will be required to sign the Terms and Conditions before commencing the programme. Applicants not selected will be informed of the Central Bank's decision and provided with relevant feedback, including details of the Innovation Hub, which may be a more suitable channel for their innovation. Once selected, each participant will work with a designated Sandbox Relationship Manager to agree objectives and to liaise on the workshop modules and any questions the participant has.

We do not provide funding to participants.

There is no charge to apply to the programme. The overall cost of the resources deployed on Sandbox activities is funded by the financial services industry as a whole. In line with the Central Bank's overall industry levy approach, the funding of the programme is achieved in a proportionate and appropriate way across sectors and regulated entities.