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
HM Treasury and U.S. Department of the Treasury outline regulatory coordination on digital finance, resilience and market modernization
HM Treasury and the U.S. Department of the Treasury outlined discussions on digital assets, stablecoins, artificial intelligence, operational resilience and regulatory modernization at the latest UK-U.S. Financial Regulatory Working Group meeting. The dialogue also covered banking, non-bank finance, capital markets and the Transatlantic Taskforce for Markets of the Future, with the group due to reconvene in early 2027.
INTERPOL finds AI enables 55% of reported African cybercrime as losses reach USD 484 million
INTERPOL found that AI enables 55% of reported cybercrimes across Africa, while cybercrime-related losses have more than doubled since 2024 to USD 484 million. Gaps in real-time data sharing among banks, telecommunications companies and law enforcement are facilitating scams and synthetic identity fraud. The report calls for stronger cross-border cooperation, standardized digital forensics, AI training and formal public-private partnerships.
Hellenic Capital Market Commission signs cooperation memorandum with University of West Attica on sustainable finance and technology
The Hellenic Capital Market Commission and the University of West Attica established a cooperation framework covering sustainable finance, corporate governance, financial technology, artificial intelligence, cybersecurity and digital transformation. They will undertake joint research and educational initiatives, exchange expertise and support financial literacy and specialized workforce development.
European Banking Federation and social partners assess generative AI impacts across banking, audiovisual and telecommunications sectors
The European Banking Federation and other European social partners published an assessment of generative AI’s effects on banking, audiovisual and telecommunications services. The report identifies issues for social dialogue and potential policy responses to manage adverse impacts and support beneficial uses.
European Commission brings AI transparency rules into effect, with corporate fines of up to EUR 15 million or 3% of global turnover
The European Commission’s AI transparency rules now require disclosure of interactions with AI and labelling and machine-readable marking of specified AI-generated or manipulated content. Companies may face fines of up to EUR 15 million or 3% of global annual turnover, while EU institutions may be fined up to EUR 750,000.
Brazilian Securities and Exchange Commission creates financial technology division and formalizes AI governance responsibilities
The Brazilian Securities and Exchange Commission created a Financial Technology Division and formalized internal responsibilities for advanced analytics and ethical, responsible AI use. The division will initially support the 2026-2027 securities tokenization project, the next regulatory sandbox round and engagement with international fintech discussions.
European Supervisory Authorities call for consistent risk-based supervision of frontier AI cyber risks
The European Supervisory Authorities called for consistent, risk-based supervision of cyber risks arising from frontier AI models. Financial entities should maintain robust governance and risk management frameworks, while DORA oversight of critical ICT third-party providers will also address these risks.
European Supervisory Authorities call for risk-based controls against frontier AI cyber risks
The European Supervisory Authorities called on financial entities to strengthen proportionate prevention, detection and management controls for cyber risks from frontier AI models. Firms should establish clear governance, update risk appetite and resilience arrangements, and enhance continuous monitoring and incident response. AI-related risks will also inform oversight of critical ICT third-party providers in 2027.
European Insurance and Occupational Pensions Authority flags elevated market risks and worsening cyber outlook for pension institutions
The European Insurance and Occupational Pensions Authority found that market risks remain elevated for occupational pension institutions and that the 12-month outlook is worsening amid geopolitical tensions, high valuations and correction concerns. Cyber risks are also rising, although the sector remains resilient due to robust defined benefit scheme finances and positive portfolio performance.
European Insurance and Occupational Pensions Authority finds insurance sector risks stable at medium level, digitalisation and cyber risks rise to high
The European Insurance and Occupational Pensions Authority assessed European insurance sector risks as stable at a medium level overall. Digitalisation and cyber risks rose to high, while geopolitical tensions weakened the outlook for macroeconomic and market risks.
Czech National Bank establishes AI Division to centralize AI deployment and oversight
The Czech National Bank will establish an AI Division on Aug. 1, 2026, to centralize AI and machine learning deployment, priorities and oversight. The division will be led by Janis Aliapulios and created from existing resources without increasing total positions.
Spanish National Securities Market Commission finds financial stability remains solid, flags technology stock and AI risks
The Spanish National Securities Market Commission found that financial stability remains solid, with low system stress despite geopolitical tensions and higher rate expectations. It flagged technology stock overvaluation and concentration, as well as AI-related risks, while noting that Spanish funds’ liquidity, leverage and short fixed-income duration mitigate vulnerabilities. Spain has authorized 20 crypto-asset service providers, with 16 applications pending.
Organisation for Economic Co-operation and Development finds dynamic AI markets alongside emerging concentration risks
The OECD found no systematic link between non-generative AI adoption and increased market power in France and Portugal, but identified emerging concentration risks in AI innovation. Generative AI may help smaller firms compete, although firms with stronger capabilities appear better placed to benefit. AI start-ups attract substantial venture capital but are frequently acquired by incumbents, supporting continued market monitoring.
Germany's Federal Financial Supervisory Authority gains market surveillance powers over financial sector AI systems
Germany’s Federal Financial Supervisory Authority has gained powers to supervise AI systems directly linked to regulated financial activities and may fine firms for violations. Its remit covers transparency obligations, prohibited practices and high-risk uses such as creditworthiness and insurance risk assessments. Initial transparency requirements take effect on August 2, 2026, with high-risk system requirements following on December 2, 2027.
U.S. Senate Committee on Banking, Housing and Urban Affairs ranking member challenges NVIDIA CEO over declining public AI testimony
Senate Banking Committee Ranking Member Elizabeth Warren criticized NVIDIA CEO Jensen Huang for declining public testimony while meeting privately with Republican senators. She called for answers on NVIDIA’s position on advanced AI chip exports to China and Huang’s lobbying against related bipartisan legislation.
Monetary Authority of Singapore and Association of Banks in Singapore establish task force on AI-driven cyber risks
The Monetary Authority of Singapore and the Association of Banks in Singapore have established an industry task force to address cyber and technology risks from frontier AI models. It will support information sharing, test AI-enabled defence tools and develop guidance for financial institutions.
Bank for International Settlements assesses how debt-financed AI investment boom complicates monetary policy calibration
The Bank for International Settlements finds that the AI boom is delivering a large, increasingly debt-financed investment impulse while its productivity payoff remains uncertain. Simultaneous effects on demand and supply are blurring cyclical signals and complicating monetary policy calibration. Potential financial stability risks include overinvestment, weaker credit quality and a correction in AI-related asset prices.
European Central Bank Banking Supervision requires cyber action plans by October, reinforces AI accountability
European Central Bank Banking Supervision expects bank boards and senior management to remain accountable for AI use and associated risks. Banks must submit cyber action plans by October 2026 addressing resilience, incident response and critical third-party oversight. The ECB also plans to publish the outcome of its 2026 geopolitical reverse stress test.
European Central Bank study finds widespread but shallow AI adoption across euro area firms
A European Central Bank study found that about 70% of euro area firms use AI, but only 7% report significant adoption, with skills, privacy concerns and system incompatibility constraining wider use. AI investment relies mainly on internal funds, and intensive users report stronger turnover and investment expectations without evidence of workforce reductions. Firms substantially underestimate competitors’ adoption, while correcting those perceptions increases their own planned AI investment.
Hong Kong Monetary Authority reports HKD 134.7 billion Exchange Fund investment income for first half of 2026
The Hong Kong Monetary Authority reported HKD 134.7 billion of Exchange Fund investment income for the first half of 2026, as gains on bonds, overseas equities and currency translation outweighed losses on Hong Kong equities. Total assets rose to HKD 4,463.6 billion at end-June, while accumulated surplus reached HKD 862.7 billion. The authority warned that market and exchange-rate volatility could weigh on second-half results.
Egypt Financial Regulatory Authority preliminarily admits two AI insurance projects to sandbox, raising first-year total to seven
The Egypt Financial Regulatory Authority has preliminarily admitted two AI insurance projects to its regulatory sandbox for testing before commercial launch. The additions bring the sandbox’s first-year total to seven projects, with insurance the most represented sector.
Bank of the Lao PDR calls for joint China ASEAN governance of AI related financial risks
The Bank of the Lao PDR called for joint China-ASEAN governance mechanisms to manage cybersecurity and systemic risks from AI in finance. Its deputy governor also joined the launch of an AI and finance cooperation project and discussions on AI-enabled local-currency cooperation.
Central Bank of the Philippines urges banks and other supervised entities to strengthen cybersecurity against AI-driven threats
The Central Bank of the Philippines has urged banks and other supervised entities to strengthen cybersecurity in response to AI-related cyber risks. Its memorandum calls for tighter security controls, better asset and vulnerability management, greater use of AI-based defensive tools, and stronger incident response and business continuity planning.
Canadian Public Accountability Board publishes audit committee insights on AI, cybersecurity, IFRS 18 implementation and public inspection reports
The Canadian Public Accountability Board published insights from its 2026 audit committee outreach, with AI, cybersecurity, IFRS 18 implementation and firm-specific public inspection reports identified as the main oversight issues. Discussions pointed to uneven IFRS 18 readiness, closer scrutiny of AI governance and auditors’ use of technology, and demand for timely inspection reports that can inform auditor assessments. IFRS 18 takes effect for annual periods beginning on or after January 1, 2027, with related Canadian Securities Administrators changes expected in fall 2026.
U.S. Senate Committee on Banking, Housing and Urban Affairs ranking member invokes ECRA to require BIS records on AI chip export control loopholes
Elizabeth Warren, the ranking member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, invoked the Export Control Reform Act to require BIS records on alleged loopholes in advanced AI chip export controls. She argued that BIS’s rescission and non-enforcement of the AI Diffusion Rule undermined the Foundry Due Diligence Rule and could allow renewed diversion of advanced chips to China. Warren requested the information by Aug. 6, 2026.