Germany’s Federal Financial Supervisory Authority (BaFin) has gained responsibility for market surveillance of artificial intelligence systems directly connected with regulated financial activities under Germany’s law implementing the European Union Artificial Intelligence Act. The mandate covers banks, insurers and other BaFin-supervised financial companies, and allows the authority to impose fines for violations. Supervision will cover transparency requirements for systems that interact directly with people, such as customer-facing chatbots, as well as prohibited AI practices and high-risk systems used for creditworthiness assessments or life and health insurance risk assessments. BaFin will coordinate this work with its ongoing supervision and expects firms and their management bodies to maintain transparency, prevent discrimination, manage risks effectively and ensure that human operators can correct or reverse decisions. AI used for other purposes, including personnel management, remains under the Federal Network Agency’s remit. Certain AI practices have been prohibited since February 2, 2025. Initial transparency requirements take effect on August 2, 2026, followed by requirements for high-risk AI systems on December 2, 2027.
BaFin2026-07-29
Germany's Federal Financial Supervisory Authority gains market surveillance powers over financial sector AI systems
Germany’s Federal Financial Supervisory Authority has gained powers to supervise AI systems directly linked to regulated financial activities and may fine firms for violations. Its remit covers transparency obligations, prohibited practices and high-risk uses such as creditworthiness and insurance risk assessments. Initial transparency requirements take effect on August 2, 2026, with high-risk system requirements following on December 2, 2027.