FSB publishes report on monitoring AI adoption and related vulnerabilities in the financial sector

The Financial Stability Board (FSB) has published a report examining how financial authorities can monitor the adoption of AI and assess related vulnerabilities. Building on its 2024 report and drawing on insights from a member survey on AI monitoring approaches, alongside other sources, the FSB highlights that while AI presents potential benefits such as enhanced efficiency, improved regulatory compliance, advanced data analytics and more personalised financial products, many financial authorities are still in an early stage of monitoring AI-related vulnerabilities. Several data collection challenges remain, including lack of agreed definitions for AI, data gaps and difficulties in assessing the criticality of AI services.

In addition, as AI adoption in the financial sector is still evolving, mapping indicators to specific vulnerabilities, ensuring regular data collection, and addressing gaps in monitoring critical areas such as third-party dependencies, market correlations, and cyber risks will help to enhance monitoring initiatives. The report also includes a range of direct and proxy indicators to support monitoring activities, as well as a case study on generative AI (GenAI). It highlights how financial institutions are exploring new use cases, and how GenAI deployment often relies on the critical role of third-party service providers which could lead to operational vulnerabilities and critical dependencies within the AI supply chain.

The report concludes with the following considerations for the FSB, standard setting bodies (SSBs) and national authorities:

• National authorities should consider ways to enhance their monitoring approaches by leveraging the potential indicators presented in the report. They could seek a more comprehensive understanding of AI usage in the financial sector by fostering greater data sharing across domestic sectoral financial regulators.
• The FSB and relevant SSBs should continue to support these efforts by facilitating cross-border cooperation, including through sharing information, experiences and good practices, and by working towards greater alignment in taxonomies and indicators where relevant and feasible.
• The FSB and relevant SSBs are encouraged to continue monitoring AI developments and addressing data gaps. This includes exploring ways to assess vulnerabilities that are particularly challenging to monitor, including market correlations, model risks, data quality and governance and misaligned AI systems.

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