FSB Calls for Stricter AI Oversight

FSB in a document titled “The Impact of Artificial Intelligence on Financial Stability” outlined the benefits and risks of AI, urging for tighter control over the technology. 

The international organisation analysed the implications of using neural networks in the global financial sector and ways to mitigate potential risks. The advantages include:

• enhanced operational efficiency;
• product personalisation;
• improved regulatory compliance;
• provision of advanced data analytics.

The vulnerabilities identified by the FSB are as follows:

• reliance on third parties;
• concentration of service providers;
• cybersecurity risks;
• market correlations;
• data quality.

Moreover, AI can also be exploited by malicious actors.

“Generative artificial intelligence increases the potential for fraud and misinformation in financial markets. Improperly configured AI systems that are not calibrated to operate within legal, regulatory, and ethical boundaries may engage in actions that harm financial stability,” the document states. 

The organisation recommended correcting data errors during the development of neural networks for the financial sector. Regulators should enhance collaboration with the private sector, while authorities need to assess the effectiveness of regulatory frameworks in addressing local and international vulnerabilities. 

Earlier, the EU adopted a comprehensive law on AI regulation.