The Bank for International Settlements (BIS) Innovation Hub launched Project Danu to leverage digital twin technology for monitoring emerging risks to financial stability, initially showcasing the approach for extreme weather events and natural catastrophe risks. The project is being developed by the BIS Innovation Hub’s Eurosystem, Hong Kong and Singapore Centres in conjunction with Banque de France, De Nederlandsche Bank, the Hong Kong Monetary Authority and the Monetary Authority of Singapore. The initiative positions digital twin technology as a tool for real-time monitoring and scenario simulation, aiming to address challenges in quantifying the financial impact of emerging risks where data, methodologies and analytical tools are insufficient. The release cited estimated global economic losses of around USD 131 billion from natural disasters in the first half of 2025, with impacts transmitted to insurers through claims and to banks through higher credit risks, property devaluation and rising default rates, and said Project Danu will develop a digital twin framework to support central banks in connecting, integrating and modelling relevant data for financial stability analysis.

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