The Hong Kong securities regulator is due next month to kick-off a pilot "fintech" project as part of a broader plan to improve the way the watchdog monitors and detects systemic risk, according to a public tender document and individuals familiar with the plans.

The Securities and Futures Commission (SFC) will team up with a sample group of 20 banks and an external technology firm to overhaul the way it uses financial data, according to the tender document seeking a third party to help the SFC run the project.

Fintech describes a new wave of financial technology firms that are poised to shake-up the global financial services industry. Regulators and banks are increasingly using these new technologies, such as artificial intelligence or data analytics, to address new regulations and better manage risk - an emerging phenomenon dubbed "regtech".

The SFC hopes to more intelligently analyse the data it gathers from financial firms and the market to spot risks such as product misselling or fraud.

"The goal is to make use of the fast evolution of fintech and regtech globally to complement the SFC's daily work and existing processes," it adds.

The SFC declined to comment.

Regulators globally are stepping-up efforts to identify systemic risks, but many are struggling to effectively analyse the growing volume of data they are gathering.

"The SFC has problems around different data sources, different formats, different time-intervals. They spend a lot of time capturing and aggregating data when they'd much rather spend time deriving insight from the data," said one individual with knowledge of the project.

The UK's Financial Conduct Authority (FCA) has also been promoting the development of "regtech" to help address a range of regulatory challenges, including data management as well as combatting money laundering and cyber risk.