AI’s Growth Leaves Financial Regulators Struggling to Catch Up

Regulators are still at an “early stage” in their efforts to track the risks posed to the financial system by the rapid adoption of artificial intelligence, global financial watchdogs warned on Friday.

In a report to the G20, the Financial Stability Board said that while many global authorities had tried to “enhance their AI-related data collection initiatives” there were still significant gaps in their understanding of how AI can contribute to the financial sector’s riskiness.

“Certain vulnerabilities, such as third-party dependencies, market correlations, cyber risks, and model governance challenges, are particularly difficult to monitor due to limited data availability, lack ...