CONNECT WITH US
Fintech

Fintech

FSB Says Banks Need to Have Company-Wide AI Regulation

PYMNTS – Fintech logo

Published on

Add as a preferred source on Google
FSB Says Banks Need to Have Company-Wide AI Regulation

A global financial watchdog is calling on banks to increase their oversight of agentic AI.

Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

The Financial Stability Board (FSB) made that call in a report published Thursday (Oct. 15) outlining proper practices for adopting artificial intelligence (AI).

“As adoption expands in scale and sophistication, AI may also amplify existing risks and introduce new ones, with implications for financial stability,” per the report, titled “Sound Practices for Responsible Adoption of Artificial Intelligence.”

“For example, less explainable models can undermine transparency, while highly autonomous agentic AI systems may act unpredictably or outside intended boundaries, potentially resulting in unauthorized or erroneous actions, data security incidents and disruption to connected systems. Some advanced models may also materially increase the speed and scale of cyber attacks,” the report added.

Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

Four of the recommended practices stress the importance of company-wide AI governance for financial institutions adopting the technology. This includes the key role the board and senior management play in “setting the overall approach and providing oversight so that AI adoption is aligned with the financial institution’s business model, risk appetite and strategy.”

The remaining eight practices cover a framework for managing AI risks from inception to retirement, focusing on things like the “effective and systematic assessment of the materiality and risks associated with AI use cases at inception and thereafter” and selecting appropriate AI technologies and data governance.


Source link
Related Topics:Fintech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.