US and European Regulators Increase Scrutiny of Bank AI

Banking regulators in the United States and Europe are increasing scrutiny of artificial intelligence to mitigate risks to global financial stability. This regulatory push follows reports of AI-enabled hacks on the AI platform Hugging Face and banks in South Korea.

In the United States, the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are questioning banks on their use of agentic AI. These inquiries focus on cybersecurity, the use of Chinese-developed technology, and the ability to audit autonomous systems to ensure bank vulnerabilities are managed.

European regulators are pursuing more immediate mandates. The Bank of England and the European Central Bank are pressing lenders to improve recovery plans, specifically advocating for bare metal recovery systems that operate independently of primary technology setups to prevent widespread economic disruption during cyberattacks. While U.S. agencies are currently gathering information, the European Central Bank has established an end-October deadline for lenders to produce formal plans to counter AI-enabled cyber threats.