What's new
Overview
This deep dive examines the latest developments in artificial intelligence, including emerging adoption patterns, key risk watch points, evolving policy and supervisory guidance, and research on the economic impact of AI.
What's new
Financial Stability Board consults on 12 sound practices for responsible AI adoption by financial institutions
The Financial Stability Board has issued a consultation report proposing 12 non-binding sound practices to support responsible adoption of artificial intelligence by financial institutions, framed as a toolkit for boards and senior management rather than a new standard. The practices address organisation-wide AI governance, risk management across AI development and deployment, and AI-related cyber, ICT, and third-party risks, and are designed to align with existing FSB and standard-setting body work and support cross-border coordination.
Bank of Korea publishes study finding AI cut work time by 3.8 percent but did not raise realized productivity
The Bank of Korea published a study finding that generative AI reduced average work time by 3.8%, or about 1.5 hours a week, implying a potential productivity gain of about 1.0%. Those time savings, however, showed essentially no relationship with actual output growth, suggesting AI efficiency gains have not yet been converted into realized productivity. The note links the gap to limited workflow redesign and incentives, with stronger output effects only among groups such as the self-employed, professionals and intensive AI users.
Dutch Authority for the Financial Markets warns advanced AI is shortening time to exploit vulnerabilities and urges stronger baseline security
The Dutch Authority for the Financial Markets warns that advanced artificial intelligence models are accelerating and sophisticating cyberattack chains, shortening the window for firms to detect and remediate vulnerabilities. It urges firms, particularly medium-sized and smaller entities with less mature security or older systems, to strengthen baseline security, patching, monitoring and incident response, including anomaly detection, logging of administrative actions and alerts for high-risk events. The authority also notes that firms can deploy artificial intelligence defensively to identify and fix vulnerabilities more quickly.
HM Treasury publishes sector AI adoption plans and launches AI Growth Lab and AI Economics Institute
HM Treasury shifted from strategy to implementation on AI adoption, confirming sector AI adoption plans, an advisory AI Growth Lab, and a joint AI Economics Institute with the Department for Science, Innovation and Technology to address data access, regulatory uncertainty, commercialisation and compute constraints. The AI Growth Lab will initially focus on legal services, while the AI Economics Institute will study AI’s impact on productivity, labour markets and growth. Reeves also outlined forthcoming legislation to enable testing of currently prohibited innovations, a Financial Services AI Adoption Plan, a new national supercomputer in Edinburgh and a National Cyber Action Plan.
French Financial Markets Authority to review how listed company boards address AI cybersecurity and geopolitical risks in 2026 governance report
The French Financial Markets Authority will use its 2026 annual report on corporate governance and executive pay to review how boards at listed companies integrate artificial intelligence, cybersecurity and geopolitical risks into governance, risk management and disclosures, and may issue related recommendations. It will also contribute in 2026 to OECD Corporate Governance Committee work on AI and governance, including boards’ use of AI, governance changes, transparency of board responsibilities, shareholder dialogue and investors’ roles.
HM Treasury publishes initial AI Economics Institute prospectus focused on AI economic evidence and scenario modelling
HM Treasury has published the initial prospectus for the AI Economics Institute, a joint research organisation with the Department for Science, Innovation and Technology, setting out its first research agenda on AI’s economic effects. The institute will build an evidence base on AI’s impact on productivity, labour markets, firms, trade and competitiveness, and develop models linking AI adoption paths to economy-wide outcomes to inform policy decisions under uncertainty. It will collaborate with government, academia, business and civil society, may publish selected analysis, and will not set policy, with its outlook intended to evolve as AI and related policy questions develop.
UK Financial Conduct Authority launches AI Input Zone survey and says it will not introduce new AI specific rules
The Financial Conduct Authority set out its approach to artificial intelligence in financial services, confirming it will not introduce AI-specific rules and will instead apply existing frameworks such as the Consumer Duty, the Senior Managers and Certification Regime, and governance and controls expectations. It launched an AI Input Zone survey under its AI Lab to collect evidence on AI use cases, barriers, areas needing further clarity and emerging risks, and plans to publish examples of good and poor practice in 2026, alongside ongoing Supercharged Sandbox and AI Live Testing initiatives and the forthcoming Mills Review on the long-term impact of AI.
French Financial Markets Authority publishes research finding artificial intelligence remains a minority investment information source but is used five times more by younger investors
The French Financial Markets Authority published a special edition of its savings and investment barometer on artificial intelligence, finding that 11 percent of French respondents use AI before investing, compared with 42 percent who rely on a bank or financial adviser, with higher use among younger, more educated and risk-tolerant investors. AI is mainly used alongside other sources, and while respondents see potential benefits such as more tailored advice and better performance or lower fees, many fear errors, poor decisions and less transparent investments.
European Central Bank Banking Supervision outlines amplified risks for financial conglomerates and calls for simpler EU banking rules
The European Central Bank Banking Supervision warned that financial conglomerates face heightened contagion across banking and insurance, driven by shared ICT infrastructure, cyber and AI risks, and exposures to non-bank financial institutions. Anneli Tuominen highlighted stricter EU rules under the Artificial Intelligence Act and Digital Operational Resilience Act and called for stronger board ICT expertise, risk management, cyber resilience, third-party oversight and crisis communication. She said the ECB will present a reverse stress test on geopolitical risks later this year and has urged the European Commission to complete banking union, simplify capital buffers and reporting, and tighten oversight of large non-bank groups.
Australian Prudential Regulation Authority details intensified AI cyber and private credit supervision and action against five super trustees
The Australian Prudential Regulation Authority told a parliamentary committee the financial system remains resilient but faces a more volatile risk environment, and it is intensifying supervision of AI governance, cyber resilience, supplier concentration and private credit spillover risks. It cited higher capital overlays, licence conditions on several entities, a Financial Accountability Regime disqualification, and enforcement against five platform trustees for investment governance failings, while leaving macroprudential settings unchanged. APRA plans further remediation and possible prudential changes for platform trustees, is finalising a supervisory plan for AI risks, and will publish Phase 2 system stress test findings in mid-2026, followed by results of a joint bank stress test with the Reserve Bank of New Zealand.
Japan Financial Services Agency reports Anthropic Project Glasswing access for Japan and some financial institutions
The Japan Financial Services Agency reported that Finance Minister Katayama confirmed Japan, including some financial institutions, has joined Anthropic’s Project Glasswing under an understanding with the U.S. Treasury, gaining access to the Claude Mythos Preview frontier AI model for cybersecurity work. Access rights are now available and preparations are largely complete, with the initiative aimed at strengthening cyber defences against cross-border economic crime, fraud and money laundering and informing broader defensive methods.
Malta Financial Services Authority sets AI governance and prudential expectations for supervised licence holders
The Malta Financial Services Authority has issued a Dear CEO letter setting supervisory expectations for AI adoption by all MFSA‑supervised licence holders, treating AI as a prudentially relevant risk to be embedded in governance, risk management and internal control frameworks in line with the evolving EU Artificial Intelligence Act. The letter stresses board and senior management accountability, governance and oversight of AI systems, third‑party and concentration risk, model validation and monitoring, data governance, regulatory compliance and operational resilience, and introduces a self‑assessment framework that firms must complete and have reviewed at board level. AI will remain a focus of supervision, including thematic work and onsite inspections, with particular attention to governance, outsourcing, customer‑facing use cases and alignment with risk appetite.
State Bank of Vietnam issues banking sector plan supporting private enterprise with goal of three state-owned commercial banks in Asia top 100 by 2030
The State Bank of Vietnam has issued a sector-wide plan to shift banking supervision toward development-oriented regulation, improve credit institutions and foreign bank branches, and expand access to modern financial services, especially for private firms. The plan prioritises regulatory review, monetary, credit, foreign exchange and payments management, supervision, bad debt resolution, restructuring, digital infrastructure and cybersecurity, and promotes digital and green transition, artificial intelligence, stronger governance and risk management, and simplified, digitalised credit processes. It also targets, by 2030, at least three state-owned commercial banks among Asia’s 100 largest by assets and four state-owned banks as leading institutions in technology, governance, scale, market share and market-regulating capacity.
Financial Stability Board Europe consultative group meets in Vienna to review 2026 work programme and financial stability risks
The Financial Stability Board’s Regional Consultative Group for Europe met in Vienna to review the FSB’s 2026 work programme, assess global and regional financial vulnerabilities, and discuss the financial stability implications of advanced AI models and system-wide exploratory stress testing. Members also held a roundtable on private credit, focusing on its growth in Europe, liquidity risks, and vulnerabilities arising from retail investor participation in private credit funds.
France's Financial Markets Authority urges regulated firms to strengthen cyber resilience against AI-driven threats
The France Autorité des marchés financiers has made cyber resilience a strategic priority in its 2026 action plan, warning that advances in artificial intelligence can accelerate exploitation of vulnerabilities and scale malicious campaigns. It will supervise compliance with the Digital Operational Resilience Act for portfolio management companies, crypto-asset and crowdfunding service providers and market infrastructures, and expects firms to strengthen cyber risk frameworks, governance and testing. The authority plans further awareness actions, surveys and inspections in 2026, and will publish a first review of major incidents after the European Supervisory Authorities issue their report.
Spanish Securities Commission publishes first semiannual bulletin on war in Iran market effects and uneven AI adoption by investment service providers
The Spanish Securities Commission (CNMV) published its first semiannual bulletin of 2026, reporting that early-year market gains reversed into sharp equity declines and higher volatility after the outbreak of war in Iran, while bond yields rose but risk premia and the financial system remained stable. The bulletin notes more moderate effects in Spain, continued growth in collective investment with a shift toward fixed income, and rising relevance of specialist non-bank advisory firms. It also includes research warning of material errors from unsupervised use of large language models in investment, analysing Euribor’s post-reform role, and documenting uneven but growing AI adoption among Spanish investment service providers.
European Central Bank warns frontier AI is reshaping cyber risk and will send banks a dear CEO letter
The European Central Bank’s Frank Elderson warned that frontier artificial intelligence models are reshaping cyber risk and urged banks to treat operational resilience as a firm-wide strategic priority, announcing a forthcoming dear CEO letter calling for proactive measures to keep systems robust and secure. He noted vulnerabilities revealed by the 2024 cyber resilience stress test despite existing response and recovery frameworks and said almost three-quarters of findings have been addressed. Elderson underscored the role of the Digital Operational Resilience Act and said the ECB will follow up with banks in a targeted way, using its system-wide view to identify areas of attention and good practices, particularly for smaller banks.
Hong Kong Securities and Futures Commission urges licensed firms to strengthen cybersecurity against frontier AI enabled threats
The Hong Kong Securities and Futures Commission has issued a circular urging licensed firms, especially internet brokers and virtual asset trading platforms, to strengthen cybersecurity in response to emerging threats from frontier AI models. Citing rising cyber incidents and increasingly sophisticated AI-enabled attacks, the SFC calls for enhanced patching and vulnerability management, detection and monitoring, and incident response and recovery. It reiterates that senior management is primarily responsible for cyber resilience and will increase supervisory engagement, thematic reviews and enforcement where necessary.
Finland's Ministry of Finance appoints working group to assess legal framework and law changes for consent-based data sharing
Finland’s Ministry of Finance has appointed a working group to assess the legal framework for expanding consent-based information disclosure and determine whether legislative changes are needed to strengthen individuals’ control over their data. The group will examine legal boundaries for consent management in public administration, identify development needs, consider the role of technologies including artificial intelligence, and explore alternative statutory disclosure models linked to broader digitalisation initiatives.
Japan Financial Services Agency publishes minister remarks that some Japanese financial institutions have been granted access to OpenAI GPT-5.5-Cyber
The Japan Financial Services Agency reported that Minister of Finance Katayama announced OpenAI, in coordination with the United States government, will grant selected Japanese financial institutions access to its frontier AI model GPT-5.5-Cyber as a cybersecurity measure. Katayama said access for a few major institutions is already underway, while discussions continue on other frontier AI systems and any broader rollout beyond currently trusted institutions, and noted the government will review reports that Anthropic may release comparable technology.
Central Bank of Russia identifies soft regulation and trusted data platforms as priorities for AI in finance
The Central Bank of Russia identified soft regulation and trusted data-sharing platforms as its main priorities for developing artificial intelligence in the financial market, while maintaining technology neutrality and a cross-sectoral regulatory framework. It will draft proposals for regulating data-sharing platforms, remove barriers to privacy-enhancing technologies, compile best practices for complying with the Ethics Code for Artificial Intelligence in Finance in 2026, and continue monitoring AI use with other agencies and market participants.
Portuguese Securities Commission examines technology-led capital market change and investor protection
The Portuguese Securities Commission’s annual conference examined how technological innovation could reshape capital markets in Portugal and the European Union. Discussions covered artificial intelligence, distributed ledger technology, investor protection and the regulatory implications for supervised entities.
Central Bank of Ireland publishes Financial Stability Review warning intensified global risks could hit Ireland’s financial system
The Central Bank of Ireland’s latest Financial Stability Review finds that risks to Ireland’s financial system from the global environment have intensified, driven by a persistent global energy supply shock, potential financial market corrections, vulnerabilities in parts of the global non-bank sector and rising cyber risks. Prolonged energy disruption could raise inflation, slow growth and increase costs for households and businesses, while high valuations and debt-funded investment in the artificial intelligence sector and greater use of private credit add to vulnerabilities. The review stresses the need to maintain strong bank capital buffers, prudent lending standards and operational resilience, and notes that public finances remain exposed due to reliance on corporation tax-driven surpluses.
European Central Bank research flags euro area fund vulnerability to reversals in highly valued US tech and AI equities
The European Central Bank’s Financial Stability Review warns that stretched valuations in US technology and artificial intelligence equities are a key financial stability vulnerability for the euro area, given investors’ growing exposures via investment funds. Euro area holdings of US equities have quadrupled over the past decade, with about 70% of the increase driven by valuation effects, and flows into US technology funds are highly sensitive to macroeconomic, monetary policy and risk shocks. The ECB cautions that weaker-than-expected AI outcomes or worsening geopolitics could trigger outflows, forced asset sales and spillovers to euro area corporate funding and household wealth.
Australian Securities & Investments Commission outlines a more hands on sandbox model for financial startups
ASIC Chair Joe Longo signalled an ambition to make ASIC’s regulatory sandbox more supportive, including a clearer path from innovation to licensing and closer coordination with the Reserve Bank of Australia and other regulators. He said rapid advances in artificial intelligence, payments and digital assets require regulators to deepen their technology capabilities while applying existing law, and noted ASIC has been addressing its technology debt and expanding its use of AI tools.