What's new
Overview
This deep dive examines the latest developments in artificial intelligence, including emerging adoption patterns, key risk watch points, evolving policy and supervisory guidance, and research on the economic impact of AI.
What's new
South Korea Financial Services Commission expands AI security testing eligibility to 75 firms
The South Korea Financial Services Commission expanded eligibility for its second frontier AI security test from 49 to 75 firms and will select up to 15 participants for one-year relief from network-separation rules. Selected firms must adopt alternative security controls and report their findings, while an interim review of the first round found that AI could scan large codebases rapidly and consistently for vulnerabilities.
Swedish Financial Supervisory Authority launches assessment of financial firms’ AI use and risk management
The Swedish Financial Supervisory Authority is assessing financial firms’ use and management of AI, including the impact of the EU AI Act. A targeted survey of a broad range of supervised firms will address emerging uses and risks, including operational resilience and cybersecurity.
Australia’s Council of Financial Regulators finds system resilient, backs unchanged macroprudential settings amid elevated risks
The Council of Financial Regulators maintained that Australia’s financial system remains resilient despite elevated geopolitical, market and cyber risks, and backed unchanged macroprudential settings. Borrower stress remains limited, but authorities emphasized sound lending standards and stronger operational resilience. A payments cyber crisis coordination framework will be published shortly, alongside ongoing work on critical third-party and AI-enabled cyber risks.
Bank of Korea finds AI-exposed industries accounted for 94% of youth employment decline
The Bank of Korea found that high-AI-exposure industries accounted for 268,000, or 94%, of Korea’s 285,000 decline in youth employment between June 2022 and June 2026. Losses were greater where AI was used for automation, while unemployment and employment exits also rose among highly exposed young workers. The note recommends apprenticeships, stronger support for workplace training and a better balance between technology and human capital incentives.
UAE Cabinet launches 32-advisor agentic AI system, adopts autonomous vehicle rules and federal financial sustainability framework
The UAE Cabinet launched an agentic AI system with 32 specialized advisors to assess policies, legislation and government initiatives. It also adopted autonomous vehicle rules and a framework embedding sustainability and environmental, social and governance considerations in federal financial policies. Additional measures cover cloud migration, AI education and international agreements on investment, digital policy and information exchange.
Eastern Caribbean Central Bank concludes 2026 AI summer camp with 18 client-focused projects
The Eastern Caribbean Central Bank concluded its 2026 AI and Python summer camp, where participants presented 18 projects addressing regional business and public sector needs. Six winning teams shared XCD 32,000, and the program shifted to externally recognized certification.
South Korea's Ministry of Economy and Finance outlines computing, manufacturing model and regional support for SME AI adoption
South Korea's Ministry of Economy and Finance outlined support for SME adoption of AI agents and physical AI. Measures include access to computing infrastructure, a manufacturing foundation model, standardized data-sharing arrangements and region-specific AI deployment support.
Saudi Arabia Insurance Authority signs HUMAIN agreement to advance insurance sector AI adoption
The Saudi Arabia Insurance Authority and HUMAIN have agreed to support AI and cognitive data center adoption across the insurance sector. The collaboration will explore priority use cases and contribute to a sector-wide strategy covering data quality, analytics, secure data sharing and governance.
Central Bank of Bahrain holds financial sector cybersecurity event focused on AI-era data risks
The Central Bank of Bahrain and the National Cyber Security Center held a cybersecurity awareness event for financial services professionals focused on data protection in the AI era. Sessions covered human risk, secure practices, artificial intelligence and emerging cyber threats.
Financial Stability Board chair warns of cyber risks from frontier AI models
Financial Stability Board Chair Andrew Bailey warned that frontier AI models could intensify cyber risk and called for safe model deployment, robust financial-sector recovery capabilities and resilient critical technology providers. He also cautioned that rising leverage, stretched valuations, market concentration and AI-related optimism could amplify a market correction.
European Central Bank assesses rapid growth in US tech borrowing and limited euro area bond market spillovers
A European Central Bank blog finds that growing US hyperscaler issuance has broadened the euro area corporate bond market without materially crowding out other issuers so far. Hyperscalers have about EUR 40 billion outstanding and account for nearly 10% of new euro-denominated non-financial corporate bond issuance. Further growth could increase concentration and borrowing costs as investors adjust portfolios and demand higher risk premiums.
Monetary Authority of Singapore commits SGD 220 million to renewed three-year financial technology scheme
The Monetary Authority of Singapore has committed SGD 220 million over three years to FSTI 4.0, supporting technology development and adoption, shared infrastructure and financial technology talent. The six-track scheme prioritizes AI and other frontier technologies, targets at least 1,000 internships and adds a scale-up grant for eligible competition finalists.
People’s Bank of China reviews cross-border payment expansion and calls for safeguards in AI agent payments
People’s Bank of China Deputy Governor Lu Lei reviewed progress in cross-border payment connectivity, including links with Hong Kong and the United Arab Emirates, a unified QR code gateway and a digital renminbi clearing platform. He urged payment providers to apply safeguards for AI agent payments, protect consumers and strengthen risk controls.
UK Financial Conduct Authority warns of AI protection misconceptions among young investors, with 44% believing AI-generated financial information is regulated
UK Financial Conduct Authority research found that four in five less experienced investors aged 18 to 40 had used AI for investment support. However, 44% mistakenly believed AI-generated financial information was regulated, while 32% wrongly expected compensation if AI advice went wrong. General-purpose AI chatbots are not regulated, and the FCA urged users to verify sources and exercise their own judgment.
Hong Kong Monetary Authority and fellow financial regulators select 36 agentic AI use cases for first GenAI Sandbox++ cohort
Hong Kong’s financial regulators have selected 36 agentic AI use cases involving 30 financial institutions and 27 technology partners for the first GenAI Sandbox++ cohort. Trials will cover end-to-end financial processes and AI-based oversight of other AI applications, with testing due to begin later in 2026.
Australian Prudential Regulation Authority and Australian Securities and Investments Commission publish frontier AI roundtable insights
The Australian Prudential Regulation Authority and Australian Securities and Investments Commission have published insights from industry roundtables on frontier AI risk. The regulators expect entities to act now as frontier AI amplifies cyber, technology and operational risks and may produce unintended outcomes through increasingly autonomous systems.
Brazil Securities Commission outlines rapid adoption of AI-based market supervision systems
Brazil Securities Commission Chair Otto Lobo outlined plans for the rapid adoption of AI-based market supervision systems. He also said the commission’s tokenization framework would remain technology-neutral while competing systems evolve.
European Central Bank survey finds workplace AI use has doubled to 52%, with uneven productivity gains
European Central Bank survey data show workplace AI use doubled from 26% in 2024 to 52% in 2026. Users report median savings of three hours a week, although the estimated economy-wide efficiency gain is about 3.8% and varies widely by task. Training gaps, limited employer support, reliability concerns and lack of interest continue to constrain adoption.
Australian Securities and Investments Commission sets 2026–27 priorities on consumer harm, AI oversight and regulatory burden
The Australian Securities and Investments Commission has set its 2026–27 priorities, combining stronger action on consumer harm and artificial intelligence risks with measures to reduce unnecessary regulatory burden. Its work will cover scams, debt collection, insurance intermediaries, buy now pay later, superannuation fee deductions and AI-related threats to consumers and markets.
South Korea Financial Services Commission proposes MyData expansion for sole proprietors, AI agent execution and wider data use
The South Korea Financial Services Commission proposed expanding MyData to sole proprietors and allowing AI agents to execute specified financial rights on users’ behalf. The plan would also broaden available data, ease controlled sharing and combination, and introduce AI recordkeeping and explanation duties. Legislative work is planned from the second half of 2026, with eligible services potentially piloted before enactment.
Bank of Japan survey finds generative AI adoption above 90% as risk management gaps persist
The Bank of Japan found that more than 90% of surveyed financial institutions are using or trialing generative AI, with use expanding into core operations involving customer information. Risk controls have improved, but governance, third-party oversight, safety, cybersecurity and data readiness require further work. The central bank will continue engaging institutions through examinations, monitoring and seminars.
Latin American Financial Action Task Force approves first regional proliferation financing risk assessment and updates fifth-round standards
The Latin American Financial Action Task Force approved the region’s first sectoral proliferation financing risk assessment and updated its fifth-round evaluation standards to incorporate humanitarian exceptions under United Nations Security Council resolutions. It also advanced mutual evaluations and adopted a regional program to assess AI and emerging-technology risks, with work continuing through 2027.
Danish Financial Supervisory Authority urges financial firms to strengthen defenses against AI-enabled cyberattacks
The Danish Financial Supervisory Authority has urged all financial firms to assess AI-enabled cyber threats and strengthen their cybersecurity and operational resilience proportionately. Firms should establish clear management accountability, improve vulnerability monitoring and patching, and test response and recovery plans against AI-driven attacks. The authority will analyze the sector’s AI use and related risks in the second half of 2026.
Central Bank of the Philippines reports regional approval of scam prevention, responsible AI and training initiatives
The Central Bank of the Philippines reported that Asia-Pacific central bank governors approved initiatives covering scam prevention, responsible AI and training for junior central bankers. The measures include an information-sharing task force to improve scam detection and work to help financial institutions manage AI risks.
Argentina Superintendency of Insurance outlines governance-led approach to artificial intelligence oversight
The Argentina Superintendency of Insurance outlined a governance-led approach to artificial intelligence oversight that supports innovation rather than prohibiting the technology. It emphasized testing, controls and decision traceability, alongside the protection of trust, ethics, transparency and solvency.