Bank regulators intensify scrutiny of AI risks

Banking regulators in the United States and Europe are increasing scrutiny of how financial institutions use advanced artificial intelligence, focusing on autonomous systems, cyber risks and recovery plans. The inquiries and supervisory approaches, described by people familiar with regulators’ thinking, are largely at an information-gathering or collaborative stage rather than setting new requirements. In the United States, the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation are asking banks about their use of advanced AI models, according to people familiar with the inquiries. Questions include whether banks use foreign-developed technology or AI agents in cyber defense, how systems are monitored and audited, whether people remain involved in key decisions, and whether autonomous systems can be shut down. The inquiries cover banks of different sizes and include written and verbal questions, the sources said. Regulators are still gathering information and have not prescribed specific actions. The three agencies declined to comment.