In a keynote speech, Claudia Buch, Chair of the Supervisory Board of the European Central Bank, called on banks to place digital transformation under board oversight and support it with robust governance, risk controls, data systems and multiyear budgets. She said supervision will remain technology neutral but not risk neutral, focusing on vulnerabilities arising from artificial intelligence, cyber threats, cloud outsourcing, tokenisation and increasingly interconnected service providers. More than 90% of directly supervised banks use artificial intelligence and 85% use generative artificial intelligence, while about one-third engage in digital asset activities. Buch said banks remain accountable for automated decisions and must preserve human judgment, address biases and remediate weaknesses in risk data, cyber resilience and legacy systems. Supervisors will increasingly assess common exposures across institutions, including cloud concentration and artificial intelligence enabled cyber risks, and expect banks to prepare for quantum resistant cryptography. Buch also argued that integrated European markets, interoperable public infrastructure and clearer rules for tokenised deposits would help banks scale digital investment. The Eurosystem’s Pontes initiative now enables tokenised asset transactions to settle in central bank money, while Appia is intended to produce a blueprint for an integrated European tokenised finance ecosystem by 2028. She cautioned that weakening prudential standards would undermine the operational and financial resilience banks need to compete with new providers.
2026-09-22European Central Bank - Banking Supervision
European Central Bank Banking Supervision calls for board oversight of bank digital strategies and stronger risk safeguards
European Central Bank Supervisory Board Chair Claudia Buch called for board oversight, multiyear investment and strong risk controls as banks expand their use of artificial intelligence, cloud services and tokenisation. Supervision will focus on common cyber, outsourcing and data vulnerabilities while holding banks accountable for automated decisions. Buch also backed integrated European markets and interoperable public infrastructure without weakening prudential standards.