The Financial Stability Board (FSB), the international body that monitors and makes recommendations about the global financial system, has released a set of guidelines to help banks, insurers and other financial institutions adopt artificial intelligence (AI) safely and responsibly.
The recommendations come as the financial sector increasingly uses AI technologies across a wide range of functions, including customer service, fraud detection, risk assessment, compliance monitoring and investment management. While AI offers significant opportunities to improve efficiency and decision-making, regulators have also raised concerns about potential risks associated with its rapid adoption.
In its report, the FSB outlined a series of sound practices designed to help financial institutions strengthen governance, oversight and risk management frameworks when deploying AI systems. The organisation emphasised that firms should ensure clear accountability for AI-related decisions and maintain adequate human supervision over critical processes.
The guidelines also call on financial institutions to improve transparency around AI models and establish controls to monitor their performance. Firms are encouraged to regularly assess risks linked to data quality, cybersecurity, model bias and operational resilience.
According to the FSB, financial institutions should ensure that AI systems are reliable, secure and aligned with existing regulatory requirements. The body warned that excessive reliance on complex AI models without proper safeguards could create vulnerabilities for individual firms and the broader financial system.
The recommendations were developed based on industry consultations and reviews of AI practices across major financial markets. The FSB noted that while AI adoption remains at varying stages globally, the technology is expected to play an increasingly important role in financial services in the coming years.
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