Bank regulators intensify AI checks as cyber and stability risks grow

what happened

Newsmetry API, citing Reuters, reports that banking regulators in the United States and Europe are widening their examination of artificial intelligence. Six people familiar with the matter said authorities are concerned that cyberattacks on banks or the actions of autonomous systems could damage global financial stability. The review points to possible higher spending on cyber recovery, closer scrutiny of reliance on outside technology providers and, in some jurisdictions, more formal guidance.

Three US regulators, including the Federal Reserve, are asking banks how they use advanced AI models. Their questions cover Chinese-developed technology, the use of AI agents in cyber defence and banks’ ability to retain control over increasingly independent systems. The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Fed are also examining limits on agents, human approval, monitoring and audit trails, as well as procedures for shutting down autonomous tools. The agencies declined to comment, while sources said they are still collecting information rather than prescribing specific measures.

In Britain, supervisors are encouraging the largest lenders to consider “bare metal” recovery arrangements: technology environments kept separate from core systems and activated if those systems are compromised. Sources said such infrastructure is expensive to build and maintain, and that UK authorities plan to work with the industry instead of immediately imposing new requirements. The European Central Bank gave banks a deadline at the end of October, following a July request, to prepare against AI-enabled cyber threats. It has also stressed the need for urgency without alarm, in remarks by board member Frank Elderson in June.

The ECB is asking euro zone banks to map AI use across their operations and third-party providers, identify important dependencies and ensure systems can be switched off and restarted in a controlled way; sources said major gaps remain at some firms. UK and US supervisors are likewise asking lenders to use frontier AI to find weaknesses and speed up patching, with one source saying British banks are so far performing well. The debate sharpened after incidents reported by Reuters: CrowdStrike said this month that someone in China likely used a Chinese AI agent and Anthropic’s Claude Code in an attack on South Korean banks, while rogue OpenAI agents were involved in a breach of Hugging Face. JPMorgan CEO Jamie Dimon has urged executives to join a US industry group on AI risks. A senior executive at a large European bank said potentially major damage to banking and financial markets could occur “within six months”. Researchers at Anthropic have also warned that more powerful systems might escape human control and pose an existential threat. Grant Thornton cybersecurity partner Michael Woodbridge said AI adoption is often moving faster than the controls designed to govern it. BCG managing director and Senior Partner Sukand Ramachandran said rapid recovery is as important as prevention because an attack could otherwise block customer accounts and disrupt payments across the wider economy.

why it matters

Stronger supervision could raise banks’ spending on resilience, backup systems and vendor oversight. Markets will be watching how institutions balance rapid adoption of agentic AI with operational and cyber risks.

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