The Financial Stability Board released a study on the implications of artificial intelligence in financial services and methods to mitigate associated risks.
AI's Impact on Financial System
On November 14, the Financial Stability Board (FSB) published a document studying the impact of AI on global financial infrastructure. The FSB noted that AI can enhance operational efficiency, personalize products, and improve regulatory compliance, but there are concerns about amplifying vulnerabilities in the sector.
AI Vulnerabilities in Financial Sector
According to the FSB, certain AI vulnerabilities can increase systemic risks, such as third-party dependencies, cyber risks, market correlations, and data quality. Malicious actors may use generative AI for fraud. The document states: "GenAI also increases the potential for financial fraud and disinformation in financial markets."
Mitigation of AI Risks
The FSB recommended addressing data and information gaps in AI monitoring in finance and suggested that regulators intensify engagement with the private sector. Additionally, regulators need to assess whether current frameworks adequately address AI-related vulnerabilities.
The FSB's analysis highlights that AI in the financial sector demands attention to reduce potential risks and enhance stability.
