In a keynote speech, European Central Bank (ECB) Supervisory Board member Patrick Montagner set out how European banking supervision is seeking to encourage banks’ digital innovation while strengthening governance and risk controls, particularly around artificial intelligence (AI), tokenisation and the interconnected risks from cybersecurity and third-party dependencies. The remarks positioned European Union frameworks including the Digital Operational Resilience Act (DORA), the Markets in Crypto-Assets Regulation and the Artificial Intelligence Act as a shared basis for consistently identifying and managing these risks across institutions. The ECB noted that over 85% of the banks it supervises are already using AI, with generative AI expanding in IT operations, legal and document analysis and frontline applications, but with persistent gaps in data quality controls, explainability, full life cycle model governance and clear accountability for AI-driven decisions. It also flagged systemic concentration risks where generative AI models are sourced from a handful of major non-European Union providers. On tokenisation, the speech distinguished tokenised deposits from stablecoins, highlighting different use cases and risk profiles, and stressed that banks should pursue pilots only with realistic business cases, cost-benefit analysis and attention to applicable authorisation frameworks. On operational resilience, DORA, applicable since January 2025, was cited for unified incident reporting, ICT third-party contract registers and oversight of critical providers, with payment fraud in the European Economic Area reported at EUR 4.2 billion in 2024 as an example of the scale of digital risk. For 2026, the ECB indicated it will continue monitoring AI with a focus on generative AI applications, deepen its assessment of third-party dependencies including concentration in critical providers, and strengthen work on operational resilience building on DORA.
European Central Bank 2026-02-03
European Central Bank outlines supervisory approach to AI, tokenisation and operational resilience in banks’ digital transformation
In a keynote speech, European Central Bank Supervisory Board member Patrick Montagner emphasized the need for banks to balance digital innovation with governance and risk controls, particularly in AI, tokenisation, and cybersecurity. The ECB highlighted AI's widespread use among banks, systemic concentration risks, and the importance of frameworks like the Digital Operational Resilience Act for managing digital risks, with plans to continue monitoring AI and third-party dependencies in 2026.