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
European Insurance and Occupational Pensions Authority report finds insurers and pension funds resilient but flags geopolitical and private market risks
The European Insurance and Occupational Pensions Authority's June 2026 Financial Stability Report says European insurers and occupational pension funds remained resilient through recent market volatility, supported by strong solvency and liquidity positions. It identifies geopolitical tensions as the main supervisory concern and also flags risks tied to private markets, less liquid asset valuations, operational resilience and artificial intelligence. Insurers, reinsurers and pension funds all remained broadly stable in 2025, although several market and structural vulnerabilities continue to require monitoring.
Danish Financial Supervisory Authority publishes half-yearly risk outlook and sets H2 2026 focus on housing cyber and AI risks
The Danish Financial Supervisory Authority's half-yearly risk outlook highlights geopolitical shocks, stretched housing prices, cyber threats and growing AI use as the main risks for the financial sector. Its H2 2026 supervisory focus will center on lending and housing developments, prioritetslån, cyber resilience and AI-related risk management. The authority will also step up work on pensions, alternative funds, crypto-asset firms and trade-based money laundering.
Central Bank of the Philippines issues non-binding AI governance principles for supervised financial institutions
The Central Bank of the Philippines issued non-binding AI governance principles for supervised financial institutions and recommended that they adopt proportionate AI governance and risk management frameworks. The guidance also covers relevant vendors and outsourced service providers, and sets minimum expectations on transparency, human oversight, fairness, security, lifecycle controls and ongoing monitoring.
Financial Planning Standards Board releases AI guidance for financial planners stressing human oversight and professional accountability
Financial Planning Standards Board Ltd. has issued new guidance on the use of artificial intelligence in financial planning. It says AI can support client service and efficiency, but planners must retain professional judgment, human oversight and responsibility for advice. The guidance also flags privacy, cybersecurity, and the reliability of AI outputs as key risk areas.
U.S. Department of the Treasury concludes AI Innovation Series with calls for clearer and more adaptive AI regulation
The U.S. Department of the Treasury said it has completed a four-part AI Innovation Series focused on artificial intelligence in financial services. Participants said AI is moving into implementation and can improve productivity, cyber resilience and fraud controls, but called for clearer and more harmonized regulation. Treasury said the discussions will inform its and FSOC’s ongoing policy work.
European Central Bank blog says intensive AI use remains rare among euro area firms despite adoption exceeding 70%
An European Central Bank blog, based on SAFE survey data, said AI adoption among euro area firms exceeded 70% in late 2025 but only 7% used it intensively. The analysis linked intensive use to innovation-focused firms, peer pressure and broader financing needs, especially bank lending. It identified skill shortages, limited business usefulness and system incompatibility as the main barriers to deeper adoption.
Reserve Bank of India launches consultation on model risk management guidance covering AI and third party models
The Reserve Bank of India has issued draft guidance on model risk management for consultation. It sets lifecycle-wide expectations for governance, oversight and controls for all models used by a wide range of regulated entities, including third party and artificial intelligence or machine learning models. Comments are due by July 24, 2026.
Bank of Italy hosts G7 Cyber Expert Group meeting on cyberattack coordination and emerging technology risks
The Bank of Italy hosted a G7 Cyber Expert Group meeting in Palermo focused on cybersecurity and operational resilience in finance. Discussions covered lessons from a recent cross-border cyberattack coordination exercise and the risks associated with artificial intelligence and quantum computing. The meeting underscored the need for international coordination to manage operational interdependencies and emerging vulnerabilities.
Council of Financial Regulators flags elevated geopolitical and cyber risks while backing unchanged macroprudential settings
The Council of Financial Regulators said Australia's financial system remains resilient and supported APRA's decision to keep macroprudential settings unchanged. It warned that geopolitical tensions and frontier AI are increasing operational and cyber risks, and expects firms to strengthen contingency planning and cyber defences. The Council also reviewed progress on the 2026 IMF FSAP, cash distribution reform and cross-agency regulatory streamlining.
South Korea Financial Services Commission launches taskforce on capital market infrastructure and targets October settlement roadmap
The South Korea Financial Services Commission has launched a taskforce to modernize capital market infrastructure, combining trading and settlement reforms with wider adoption of AI and blockchain. Priorities outlined at the kickoff meeting include a roadmap for shortening the settlement cycle by October 2026, extended trading hours, AI-based market surveillance and removal of regulatory barriers to AI use. Regular meetings will review these measures and related regulatory hurdles.
Central Bank of Russia reports June business climate index fell to 1.1, first AI survey finds one in seven firms use the technology
The Central Bank of Russia’s June business survey showed the Business Climate Index fell to 1.1 points from 1.7 in May as companies became more cautious about the next three months. Price expectations declined for a fifth straight month. A first central bank survey on artificial intelligence found one in seven enterprises uses AI, led by service companies.
World Bank report says AI could raise Poland's real GDP by 1.3% to 12.1% by 2035
The World Bank said in a new report that AI could raise Poland's real GDP by 1.3% to 12.1% by 2035, with productivity gains starting within three years. It said the scale of the benefit will depend on investment, worker adaptation and supportive policies, with wider AI adoption, stronger managerial capacity and reskilling measures all critical to the outcome.
European Central Bank analysis finds AI has reduced US job growth in high substitution risk occupations without a clear wage effect
The European Central Bank published research indicating that AI has already shifted US job growth away from occupations with high substitution risk, even though the overall employment effect remains uncertain. It estimates that high-risk occupations grew around 15 percentage points less than low-risk occupations between 2019 and 2025, with no significant wage-growth gap yet visible. High-risk jobs fell by more than 4% over the period, while low-risk jobs rose by 13%.
Bank of England publishes research finding GPT-3.5 tracks short-horizon inflation attitudes but lacks a consistent inflation model
A Bank of England staff working paper finds GPT-3.5 can mimic UK household inflation perceptions at an aggregate level when given price signals, especially at short horizons. The paper also finds weak individual-level alignment, unreliable longer-term expectations and inconsistent sensitivity across inflation components. The framework is presented as a way to test LLMs for research and survey design.
European Central Bank outlines bank supervision simplification agenda and plans cyber resilience letter to CEOs
In remarks published by the European Central Bank, Frank Elderson said ECB Banking Supervision is pursuing simplification that cuts unnecessary complexity without weakening resilience, while arguing that fragmented EU banking markets rather than capital rules are the bigger drag on competitiveness. He highlighted faster approval processes, a planned dear CEO letter on cyber resilience and continued work on a digital euro pilot in 2027 with potential issuance readiness in 2029 if legislation is passed in 2026.
Italian Institute for Insurance Supervision publishes macroprudential committee assessment that global uncertainty remains the main risk to Italy’s financial system
The Italian Institute for Insurance Supervision published a macroprudential committee update saying the main risks to Italy’s financial system still come from a highly uncertain international environment, despite broadly solid financial conditions and orderly markets. The committee also highlighted operational and cyber risks linked to artificial intelligence, continued monitoring household holdings of certificates, and reviewed work on cryptoasset investments and benchmarks.
European Banking Authority reports EU EEA banks remain resilient while highlighting rising geopolitical cyber and non-bank risks
The European Banking Authority said EU and EEA banks remain resilient, supported by solid capital, liquidity, asset quality and profitability, despite higher uncertainty in financial markets. Its latest risk publications also warn of rising geopolitical, operational and cyber risks, along with growing interconnectedness between banks, non-bank financial institutions and private credit markets.
China's National Financial Regulatory Administration issues 32 point guidance on safe AI development and use in banking and insurance
China's National Financial Regulatory Administration has issued guidance for banks and insurers on the safe development and use of AI. The 32 measures require full life cycle governance, stronger data and computing arrangements, and AI risk controls including classification, high risk application entry management and human oversight. Supervisors will oversee implementation, monitor compliance risks and take action against violations.
China Banking and Insurance Regulatory Commission issues guidance on safe AI development and use in banking and insurance
The China Banking and Insurance Regulatory Commission has issued guidance requiring banks and insurers to govern AI through board-level oversight, full life cycle controls and risk-based classification of applications. It sets expectations for model, data, computing, transparency and cybersecurity controls, including labelling of AI-generated content and human intervention for high-risk uses. Firms using generative AI in public-facing or high-risk scenarios must report this to the regulator.
Dubai International Financial Centre launches consultation on data protection amendments for AI systems
The Dubai International Financial Centre has opened a consultation on amendments to its Data Protection Regulations focused on AI-enabled and data-driven systems. The proposals would strengthen safety and privacy-by-design requirements, clarify certification obligations and the Autonomous Systems Officer role, and let the Commissioner recognise accreditation and certification schemes. Comments are due by 18 July 2026.
Financial Stability Board convenes roundtable on audit quality and ownership changes in the global audit industry
The Financial Stability Board held a roundtable on the financial stability implications of structural change in the global audit industry. Discussions focused on audit firm ownership changes linked to technology investment, including artificial intelligence, and on how those shifts may affect audit quality and the adequacy of existing standards. Participants also discussed ways to address a recent adverse trend in audit inspection findings.
International Organization of Securities Commissions publishes SupTech report showing wider supervisory use but persistent cyber and funding constraints
The International Organization of Securities Commissions published a SupTech report based on a survey of 49 jurisdictions, finding that supervisory technology is becoming embedded in core oversight functions. Use is strongest in investor protection and capital markets supervision, with digital assets emerging as a growth area. Cyber risk, funding limits and weak long-term workforce planning remain the main constraints.
South Korea Financial Services Commission updates financial sector AI guidelines and outlines phased sandbox testing
The South Korea Financial Services Commission has issued revised AI guidelines for the financial sector, setting out seven principles for AI use by financial companies and fintech firms. The self-regulatory framework takes effect on June 22, 2026, with supporting risk management and security guidance to follow. The commission also outlined further work on regulatory easing, AI accountability rules and phased sandbox testing for AI agents in the second half of 2026.
China Securities Regulatory Commission sets out market reforms, wider STAR Market access for AI and a RMB foreign exchange futures pilot
In remarks at the Lujiazui Forum, the China Securities Regulatory Commission outlined a new reform agenda for listings, products and cross-border access. It plans broader STAR Market access for artificial intelligence and other hard-technology issuers, faster M&A and refinancing tools including shelf issuance, active ETFs and commercial real estate REITs, and work toward a RMB foreign exchange futures pilot. The commission also signaled tighter oversight of AI-related market abuse and unlawful cross-border business.
Dubai International Financial Centre launches banking report warning lagging transformation could cut industry profit pools by USD 170bn by 2030
Dubai International Financial Centre has released a banking report saying resilience and AI-led operating model change will determine banks' long-term performance more than scale or legacy. It warns that without decisive transformation, industry profit pools could fall by USD 170bn by 2030, as challenger banks force incumbents to match faster, more personalized and lower-cost models. The report is the second in DIFC's four-part 2026 Future of Finance series.