The Financial Stability Board (FSB) has released a report offering guidance to authorities on monitoring the adoption of artificial intelligence (AI) in the financial sector. The report outlines both direct and proxy indicators to help track AI use and related vulnerabilities within the financial system.
According to the FSB, while authorities have improved their understanding of AI applications, benefits, and risks, efforts to monitor these developments remain at an early stage. The report notes ongoing challenges such as data gaps and a lack of standardized taxonomies, which complicate consistent oversight.
A key focus of the report is on third-party service providers that assist financial institutions in developing and deploying AI applications. The FSB warns that reliance on a limited number of critical third-party suppliers—especially with the rise of generative AI (GenAI)—can expose institutions to operational vulnerabilities. These dependencies often center around specialized hardware, cloud infrastructure, and pre-trained models. The report presents a case study on GenAI that highlights issues related to criticality, concentration, substitutability, and systemic relevance of third-party providers.
To address these challenges, the FSB encourages national authorities to improve their monitoring strategies by using the indicators detailed in the report. The organization also plans to promote greater alignment in taxonomies and indicators through international cooperation.
"The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups."
The FSB is chaired by Andrew Bailey, Governor of the Bank of England. Its Secretariat is based in Basel, Switzerland at the Bank for International Settlements.