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
World Bank report says AI could raise Poland's real GDP by 1.3% to 12.1% by 2035
The World Bank said in a new report that AI could raise Poland's real GDP by 1.3% to 12.1% by 2035, with productivity gains starting within three years. It said the scale of the benefit will depend on investment, worker adaptation and supportive policies, with wider AI adoption, stronger managerial capacity and reskilling measures all critical to the outcome.
European Central Bank analysis finds AI has reduced US job growth in high substitution risk occupations without a clear wage effect
The European Central Bank published research indicating that AI has already shifted US job growth away from occupations with high substitution risk, even though the overall employment effect remains uncertain. It estimates that high-risk occupations grew around 15 percentage points less than low-risk occupations between 2019 and 2025, with no significant wage-growth gap yet visible. High-risk jobs fell by more than 4% over the period, while low-risk jobs rose by 13%.
Bank of England publishes research finding GPT-3.5 tracks short-horizon inflation attitudes but lacks a consistent inflation model
A Bank of England staff working paper finds GPT-3.5 can mimic UK household inflation perceptions at an aggregate level when given price signals, especially at short horizons. The paper also finds weak individual-level alignment, unreliable longer-term expectations and inconsistent sensitivity across inflation components. The framework is presented as a way to test LLMs for research and survey design.
European Central Bank outlines bank supervision simplification agenda and plans cyber resilience letter to CEOs
In remarks published by the European Central Bank, Frank Elderson said ECB Banking Supervision is pursuing simplification that cuts unnecessary complexity without weakening resilience, while arguing that fragmented EU banking markets rather than capital rules are the bigger drag on competitiveness. He highlighted faster approval processes, a planned dear CEO letter on cyber resilience and continued work on a digital euro pilot in 2027 with potential issuance readiness in 2029 if legislation is passed in 2026.
Italian Institute for Insurance Supervision publishes macroprudential committee assessment that global uncertainty remains the main risk to Italy’s financial system
The Italian Institute for Insurance Supervision published a macroprudential committee update saying the main risks to Italy’s financial system still come from a highly uncertain international environment, despite broadly solid financial conditions and orderly markets. The committee also highlighted operational and cyber risks linked to artificial intelligence, continued monitoring household holdings of certificates, and reviewed work on cryptoasset investments and benchmarks.
European Banking Authority reports EU EEA banks remain resilient while highlighting rising geopolitical cyber and non-bank risks
The European Banking Authority said EU and EEA banks remain resilient, supported by solid capital, liquidity, asset quality and profitability, despite higher uncertainty in financial markets. Its latest risk publications also warn of rising geopolitical, operational and cyber risks, along with growing interconnectedness between banks, non-bank financial institutions and private credit markets.
China's National Financial Regulatory Administration issues 32 point guidance on safe AI development and use in banking and insurance
China's National Financial Regulatory Administration has issued guidance for banks and insurers on the safe development and use of AI. The 32 measures require full life cycle governance, stronger data and computing arrangements, and AI risk controls including classification, high risk application entry management and human oversight. Supervisors will oversee implementation, monitor compliance risks and take action against violations.
China Banking and Insurance Regulatory Commission issues guidance on safe AI development and use in banking and insurance
The China Banking and Insurance Regulatory Commission has issued guidance requiring banks and insurers to govern AI through board-level oversight, full life cycle controls and risk-based classification of applications. It sets expectations for model, data, computing, transparency and cybersecurity controls, including labelling of AI-generated content and human intervention for high-risk uses. Firms using generative AI in public-facing or high-risk scenarios must report this to the regulator.
Dubai International Financial Centre launches consultation on data protection amendments for AI systems
The Dubai International Financial Centre has opened a consultation on amendments to its Data Protection Regulations focused on AI-enabled and data-driven systems. The proposals would strengthen safety and privacy-by-design requirements, clarify certification obligations and the Autonomous Systems Officer role, and let the Commissioner recognise accreditation and certification schemes. Comments are due by 18 July 2026.
Financial Stability Board convenes roundtable on audit quality and ownership changes in the global audit industry
The Financial Stability Board held a roundtable on the financial stability implications of structural change in the global audit industry. Discussions focused on audit firm ownership changes linked to technology investment, including artificial intelligence, and on how those shifts may affect audit quality and the adequacy of existing standards. Participants also discussed ways to address a recent adverse trend in audit inspection findings.
International Organization of Securities Commissions publishes SupTech report showing wider supervisory use but persistent cyber and funding constraints
The International Organization of Securities Commissions published a SupTech report based on a survey of 49 jurisdictions, finding that supervisory technology is becoming embedded in core oversight functions. Use is strongest in investor protection and capital markets supervision, with digital assets emerging as a growth area. Cyber risk, funding limits and weak long-term workforce planning remain the main constraints.
South Korea Financial Services Commission updates financial sector AI guidelines and outlines phased sandbox testing
The South Korea Financial Services Commission has issued revised AI guidelines for the financial sector, setting out seven principles for AI use by financial companies and fintech firms. The self-regulatory framework takes effect on June 22, 2026, with supporting risk management and security guidance to follow. The commission also outlined further work on regulatory easing, AI accountability rules and phased sandbox testing for AI agents in the second half of 2026.
China Securities Regulatory Commission sets out market reforms, wider STAR Market access for AI and a RMB foreign exchange futures pilot
In remarks at the Lujiazui Forum, the China Securities Regulatory Commission outlined a new reform agenda for listings, products and cross-border access. It plans broader STAR Market access for artificial intelligence and other hard-technology issuers, faster M&A and refinancing tools including shelf issuance, active ETFs and commercial real estate REITs, and work toward a RMB foreign exchange futures pilot. The commission also signaled tighter oversight of AI-related market abuse and unlawful cross-border business.
Dubai International Financial Centre launches banking report warning lagging transformation could cut industry profit pools by USD 170bn by 2030
Dubai International Financial Centre has released a banking report saying resilience and AI-led operating model change will determine banks' long-term performance more than scale or legacy. It warns that without decisive transformation, industry profit pools could fall by USD 170bn by 2030, as challenger banks force incumbents to match faster, more personalized and lower-cost models. The report is the second in DIFC's four-part 2026 Future of Finance series.
Central Bank of Russia publishes first AI information security recommendations for financial institutions
The Central Bank of Russia has issued its first recommendations on information security for financial institutions using AI. The guidance maps AI-related risks and cyberattack tactics and recommends human confirmation where AI is used in high-risk critical processes such as payment transactions. It also calls for internal AI threat models and security policies and highlights vendor security practices, including bug bounty participation.
European Central Bank publishes working paper finding firms react to domestic but not foreign peer AI investment
The European Central Bank has published a working paper, representing the authors’ views, finding that firms underestimate peers’ AI investment and increase their own planned AI spending when given accurate information. The effect is driven by domestic peers, with a 1 percentage point rise in expected domestic peer adoption increasing a firm’s own expected AI investment rate by 0.570 percentage points, while foreign peer effects were not statistically significant. Treated firms planned to allocate 10.13% of investment to AI versus 8.33% in the control group.
Hong Kong Mandatory Provident Fund Schemes Authority launches AI chatbot for personalized MPF investment education
The Hong Kong Mandatory Provident Fund Schemes Authority has launched an AI chatbot on its MPF investment education website to give scheme members real-time, personalized information based on official MPFA resources. The tool explains MPF investment concepts, provides source references and visual aids, and suggests related questions. It does not provide investment advice, recommend funds, or assess suitability, and will later be extended to other education tools including the retirement planning mobile app.
Belgium Financial Services and Markets Authority warns frontier AI heightens cyber risk and tells DORA firms to strengthen controls
The Belgium Financial Services and Markets Authority has warned that frontier AI systems are making cyberattacks easier, faster and more scalable, requiring regulated firms to reassess ICT risk even if they were previously seen as lower-risk targets. It says DORA provides the core response framework and expects in-scope firms to strengthen asset inventories, patching, detection and incident response, and oversight of ICT service providers. The guidance is also recommended for firms outside DORA's scope.
Canadian Securities Administrators warn of rising fraud risks for older investors and urge use of trusted contacts
The Canadian Securities Administrators warned that older investors are increasingly exposed to fraud and financial abuse as digital platforms and AI make scams look more legitimate. It urged investors to verify registration, be wary of unsolicited and crypto-related offers, and avoid relying on apparent endorsements from public figures. The CSA also reminded investors to name a Trusted Contact Person on investment accounts as a safeguard against suspected abuse or exploitation.
Hong Kong Insurance Authority adds three insurers to AI Cohort Programme taking core participants to 10
The Hong Kong Insurance Authority added three insurers to its AI Cohort Programme, taking the number of core participants to 10 since August 2025. At the AI Cohort Symposium, participating insurers outlined plans for AI centres of excellence, talent development and deployment of AI tools. The authority also highlighted stronger governance of AI use cases and broader support from Hong Kong's AI and insurtech ecosystem.
Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan publishes first supervisory assessment finding banks model risk management remains at a formative stage
Kazakhstan’s Agency for Regulation and Development of the Financial Market published the results of its first supervisory assessment of model risk management at second-tier banks. It found the frameworks are still being built and need stronger governance, independent control and validation. The report also sets supervisory expectations for traditional, machine learning and artificial intelligence based models.
Dutch Authority for the Financial Markets says AI Act implementing bill is workable but seeks changes to supervisory split and oversight conditions
The Dutch Authority for the Financial Markets said the Dutch AI Act implementing bill is workable in principle but needs changes to support effective supervision in finance. It flagged the proposed division of responsibilities with DNB, and said effective oversight will require clear powers, data-sharing arrangements, publication rules and sufficient capacity. The authority also said both supervisors should oversee prohibited AI uses and high-risk applications within their respective mandates.
U.S. Senate Committee on Banking, Housing and Urban Affairs ranking member calls for markup of AI chip export legislation
The U.S. Senate Banking Committee published hearing remarks in which Ranking Member Elizabeth Warren called for markup this month of bipartisan bills to restrict advanced AI chip flows to China. She also warned that heavily debt-financed AI infrastructure spending could create financial stability risks through private credit funds and banks if AI companies cannot meet their obligations.
U.S. Senate Committee on Banking, Housing and Urban Affairs holds hearing on AI benefits risks and competition with China
The U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on AI's implications for the economy, financial services, consumers and U.S. competition with China. In opening remarks, Chairman Tim Scott urged a measured approach that addresses major risks without impeding lending, credit access or startup growth. He also pointed to AI's potential to cut costs, speed services, improve fraud detection and reshape work, with worker training and export controls part of the policy debate.
South African Reserve Bank flags higher financial stability vulnerabilities from Middle East conflict and frontier AI while finding system resilient
The South African Reserve Bank’s first 2026 Financial Stability Review finds that residual vulnerability in South Africa’s financial system has increased since November 2025, driven mainly by the escalation of the Middle East conflict and rapid advances in frontier artificial intelligence. The review highlights heightened risks from volatile capital flows, fiscal stress, household distress and operational disruption, alongside persistent structural and climate-related vulnerabilities. Systemically important institutions remain well capitalised and liquid, and the Bank plans to provide deposit facilities to central counterparties by end-2026 and to finalise indicators for a positive cycle-neutral countercyclical capital buffer in 2027.