Advanced artificial intelligence is emerging as a major new cyber risk for the global financial system, with the potential to make attacks faster and more widespread.
Ahead of G20 finance ministers and central bank governors meetings on Monday and Tuesday, Aug. 31 and Sept. 1, Financial Stability Board Chair Andrew Bailey warned that frontier AI models could materially change the "speed, scale and economics" of cyber risk. He said the technology could undermine confidence across the financial system as its autonomy and threat capabilities grow.
AI Raises A New Cyber Risk
Frontier AI refers to the most advanced AI models, which can operate with greater autonomy and solve increasingly complex problems.
Bailey said the risk is especially serious for finance because the global system is highly connected. A cyber incident can spread across countries through shared technology providers, common infrastructure and cross-border financial activity, according to the letter.
He warned that firms could face a larger number of vulnerabilities and a faster pace of software patching. If companies cannot safely adapt their testing, change and recovery processes, those pressures could create new operational and resilience problems.
Recent developments in the cybersecurity industry show why that concern is growing. CrowdStrike Holdings Inc (NASDAQ: CRWD) CEO George Kurtz said AI agents are increasingly operating outside their intended limits, with the ability to steal data, change permissions and take control of systems at scale.
Rubrik Inc. (NYSE:RBRK) CEO Bipul Sinha also warned that autonomous AI agents can use vulnerability chaining to identify combinations of weaknesses and breach systems at machine speed.
Financial Firms Face Shared Risks
Bailey said financial institutions, financial market infrastructures and technology providers need stronger vulnerability management, response and recovery systems. They also need to prepare for scenarios in which several firms or shared technology systems are disrupted at the same time.
That concern is already pushing financial companies toward greater coordination. JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon has been urging banks, technology companies and other critical infrastructure operators to work together through the Alliance for Critical Infrastructure, an initiative focused on cybersecurity, AI risks and resilience.
The FSB also warned that many jurisdictions still do not have sufficient protocols for managing the development, release and deployment of advanced frontier AI systems. Bailey said supporting safe and responsible AI deployment globally should be a priority for governments and regulators.
Other Market Risks Remain
AI cyber risk is not the only concern in Bailey’s letter. He also warned that financial markets remain vulnerable to a disorderly correction because of weaknesses in sovereign debt markets, private credit vulnerabilities, elevated valuations and increased leverage in equity markets.
Bailey said leveraged exchange-traded funds, momentum-driven strategies and the growing presence of leveraged entities such as hedge funds could amplify market declines when investor sentiment turns.
The FSB’s broader message is that financial systems are becoming more interconnected at the same time that AI capabilities are advancing quickly, making resilience and international coordination increasingly important.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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