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
Monetary Authority of Singapore publishes SAFR framework for runtime safeguards on AI agents in finance
The Monetary Authority of Singapore has published the SAFR white paper, an industry framework for runtime safeguards on AI agents in financial services. It proposes governance checkpoints that verify and record proposed actions before execution so agents operate within firms’ mandates, policies and risk limits. MAS also said future adoption will be supported through BuildFin.ai collaboration, pilots and sandbox testing.
Securities Commission Malaysia launches consultation on corporate governance reforms including shareholder litigation fund and technology oversight
Securities Commission Malaysia has launched a consultation on reforms to strengthen Malaysia’s corporate governance framework. The proposals would tighten requirements for company secretaries, create a shareholder litigation fund, set clearer governance expectations for companies with concentrated ownership, and clarify board oversight and disclosure expectations for technology and artificial intelligence. Feedback is open until 31 July 2026.
Intergovernmental Action Group against Money Laundering in West Africa outlines summit recommendations on AML governance, AI controls and regional supervisory expectations
The Intergovernmental Action Group against Money Laundering in West Africa published recommendations from its 2026 West African Compliance Summit calling for stronger integration of governance, Enterprise Risk Management and AML/CFT/PF compliance. Participants urged regional peer learning, proportionate minimum expectations for AML supervisory tools, and stronger controls around AI use, including validation, explainability, human oversight and board reporting. They also called for better information sharing and closer public-private and cross-border cooperation.
World Federation of Exchanges publishes Mythos AI paper and urges stronger existing cyber resilience frameworks
The World Federation of Exchanges has issued a position paper on the Mythos AI model, saying it reinforces existing cybersecurity trends rather than creating a wholly new threat. For exchanges and clearinghouses, the paper points to stronger vulnerability management, patching, access controls and incident response, alongside continued industry coordination and information-sharing.
International Monetary Fund identifies systemic AI cyber risks and sets out seven resilience actions
The International Monetary Fund warns that AI could turn vulnerabilities in shared financial technologies and critical service providers into rapid, correlated disruptions. It recommends seven resilience actions covering surveillance, third-party oversight, cross-sector exercises, incident reporting, international coordination and frontier AI monitoring. Financial institutions should prioritize containment, recovery and machine-speed defenses.
French Financial Markets Authority publishes 2026 market and risk mapping highlighting geopolitical cyber and frontier AI risks
The French Financial Markets Authority has issued its 2026 market and risk mapping, highlighting geopolitical instability, cyber risk, market resilience and the rise of advanced frontier AI models. It also points to changes in household financial savings amid innovation and increasing risks.
Australian Securities & Investments Commission convenes capital markets roundtable after report warns Australia must move faster on market innovation
The Australian Securities & Investments Commission has convened a capital markets roundtable and published a report warning that Australia must move faster on financial market innovation to keep pace with other jurisdictions. The report points to automation, shorter settlement cycles, tokenisation and AI as reshaping market structure, while also flagging concentration, retail conduct, resilience and cyber risks. ASIC plans to publish the roundtable's practical themes and actions.
New Zealand Financial Markets Authority releases conduct report setting 2026 27 priorities and consumer credit transfer
The New Zealand Financial Markets Authority has released its second annual Financial Conduct Report, setting priorities for 2026/27 around remuneration conflicts, product design, complaints, and fraud prevention. It also highlights technology transformation and artificial intelligence as growing supervisory issues. From 1 July 2026, the authority will take on responsibility for consumer credit, bringing it under a single conduct regulator for financial services.
Bank for International Settlements warns of inflation, AI, fiscal and non-bank stability risks in Annual Economic Report 2026
The Bank for International Settlements' Annual Economic Report 2026 warns that the global economy faces renewed inflation risks, possible overextension in AI investment, persistent financial vulnerabilities and weak public finances. It says policy discipline across monetary, fiscal and financial stability frameworks is needed, with particular concern over the interaction between high sovereign debt and leveraged non-banks such as hedge funds.
OECD paper outlines four policy priorities to use AI and digital tools for SME sustainable finance
The OECD has published a paper on how AI and digital tools could improve SMEs' access to sustainable finance by reducing reporting, origination and monitoring frictions. It says progress depends on interoperable data infrastructure, stronger verification of sustainability data, clearer incentives for SME reporting and safeguards for AI use. The paper also stresses that more advanced AI applications should complement, not replace, human judgment.
European Central Bank analyses euro area current account surplus fall to 1.7 percent of GDP in 2025 amid US tariffs MNE flows and China competition
The European Central Bank said in an Economic Bulletin analysis that the euro area current account surplus fell to 1.7% of GDP in 2025 from 2.7% in 2024, driven mainly by wider services and primary income deficits rather than weaker goods trade. It linked the change chiefly to US tariffs and US multinational structures, stronger Chinese competition and rising AI-related digital imports and investment. The ECB expects the surplus to remain below its 2024 level, falling to about 1.3% of GDP in 2026 before recovering to around 1.5% by 2028.
Monetary Authority of Singapore to establish Future of Finance Institute focused on AI and tokenisation adoption
The Monetary Authority of Singapore will establish a Future of Finance Institute to speed industry adoption of AI and tokenisation. It will consolidate existing MAS-backed innovation efforts and provide shared resources through a knowledge hub, collaborative projects, sandboxes and implementation toolkits. More detail on its strategy and governance will be announced later this year.
European Central Bank Banking Supervision flags AI-driven cyber and concentration risks as a 2026-28 supervisory priority
In a letter to an MEP, European Central Bank Banking Supervision said AI-related cyber and operational risks are a supervisory priority for 2026-28 and warned that advanced AI could increase the likelihood of systemic cyber incidents. It is reviewing banks' AI use and controls, following up on weaknesses through supervision, and urging banks to test AI-driven cyber scenarios. The ECB also said it is monitoring wider financial stability risks from concentrated reliance on common AI tools and technology providers.
European Insurance and Occupational Pensions Authority financial stability report finds insurers and pension funds resilient despite geopolitical and market risks
The European Insurance and Occupational Pensions Authority's June 2026 Financial Stability Report says European insurers and occupational pension funds remained resilient despite geopolitical uncertainty and market volatility. Strong solvency and liquidity supported the sectors, but the report flags continuing vulnerabilities from financial market repricing, operational risks, claims inflation, sovereign and financial sector linkages, and private market exposures. It also highlights risks tied to artificial intelligence, less liquid assets and the Dutch pension transition.
European Insurance and Occupational Pensions Authority report finds insurers and pension funds resilient but flags geopolitical and private market risks
The European Insurance and Occupational Pensions Authority's June 2026 Financial Stability Report says European insurers and occupational pension funds remained resilient through recent market volatility, supported by strong solvency and liquidity positions. It identifies geopolitical tensions as the main supervisory concern and also flags risks tied to private markets, less liquid asset valuations, operational resilience and artificial intelligence. Insurers, reinsurers and pension funds all remained broadly stable in 2025, although several market and structural vulnerabilities continue to require monitoring.
Danish Financial Supervisory Authority publishes half-yearly risk outlook and sets H2 2026 focus on housing cyber and AI risks
The Danish Financial Supervisory Authority's half-yearly risk outlook highlights geopolitical shocks, stretched housing prices, cyber threats and growing AI use as the main risks for the financial sector. Its H2 2026 supervisory focus will center on lending and housing developments, prioritetslån, cyber resilience and AI-related risk management. The authority will also step up work on pensions, alternative funds, crypto-asset firms and trade-based money laundering.
Central Bank of the Philippines issues non-binding AI governance principles for supervised financial institutions
The Central Bank of the Philippines issued non-binding AI governance principles for supervised financial institutions and recommended that they adopt proportionate AI governance and risk management frameworks. The guidance also covers relevant vendors and outsourced service providers, and sets minimum expectations on transparency, human oversight, fairness, security, lifecycle controls and ongoing monitoring.
Financial Planning Standards Board releases AI guidance for financial planners stressing human oversight and professional accountability
Financial Planning Standards Board Ltd. has issued new guidance on the use of artificial intelligence in financial planning. It says AI can support client service and efficiency, but planners must retain professional judgment, human oversight and responsibility for advice. The guidance also flags privacy, cybersecurity, and the reliability of AI outputs as key risk areas.
U.S. Department of the Treasury concludes AI Innovation Series with calls for clearer and more adaptive AI regulation
The U.S. Department of the Treasury said it has completed a four-part AI Innovation Series focused on artificial intelligence in financial services. Participants said AI is moving into implementation and can improve productivity, cyber resilience and fraud controls, but called for clearer and more harmonized regulation. Treasury said the discussions will inform its and FSOC’s ongoing policy work.
European Central Bank blog says intensive AI use remains rare among euro area firms despite adoption exceeding 70%
An European Central Bank blog, based on SAFE survey data, said AI adoption among euro area firms exceeded 70% in late 2025 but only 7% used it intensively. The analysis linked intensive use to innovation-focused firms, peer pressure and broader financing needs, especially bank lending. It identified skill shortages, limited business usefulness and system incompatibility as the main barriers to deeper adoption.
Reserve Bank of India launches consultation on model risk management guidance covering AI and third party models
The Reserve Bank of India has issued draft guidance on model risk management for consultation. It sets lifecycle-wide expectations for governance, oversight and controls for all models used by a wide range of regulated entities, including third party and artificial intelligence or machine learning models. Comments are due by July 24, 2026.
Bank of Italy hosts G7 Cyber Expert Group meeting on cyberattack coordination and emerging technology risks
The Bank of Italy hosted a G7 Cyber Expert Group meeting in Palermo focused on cybersecurity and operational resilience in finance. Discussions covered lessons from a recent cross-border cyberattack coordination exercise and the risks associated with artificial intelligence and quantum computing. The meeting underscored the need for international coordination to manage operational interdependencies and emerging vulnerabilities.
Council of Financial Regulators flags elevated geopolitical and cyber risks while backing unchanged macroprudential settings
The Council of Financial Regulators said Australia's financial system remains resilient and supported APRA's decision to keep macroprudential settings unchanged. It warned that geopolitical tensions and frontier AI are increasing operational and cyber risks, and expects firms to strengthen contingency planning and cyber defences. The Council also reviewed progress on the 2026 IMF FSAP, cash distribution reform and cross-agency regulatory streamlining.
South Korea Financial Services Commission launches taskforce on capital market infrastructure and targets October settlement roadmap
The South Korea Financial Services Commission has launched a taskforce to modernize capital market infrastructure, combining trading and settlement reforms with wider adoption of AI and blockchain. Priorities outlined at the kickoff meeting include a roadmap for shortening the settlement cycle by October 2026, extended trading hours, AI-based market surveillance and removal of regulatory barriers to AI use. Regular meetings will review these measures and related regulatory hurdles.
Central Bank of Russia reports June business climate index fell to 1.1, first AI survey finds one in seven firms use the technology
The Central Bank of Russia’s June business survey showed the Business Climate Index fell to 1.1 points from 1.7 in May as companies became more cautious about the next three months. Price expectations declined for a fifth straight month. A first central bank survey on artificial intelligence found one in seven enterprises uses AI, led by service companies.