Cutting-edge AI models pose a systemic threat to the financial sector, European regulators are warning.
On Tuesday, the European Systemic Risk Board (ESRB) sounded the alarm about “frontier AI” models that could empower systemic cyberattacks. Last month, it raised the threat level to “severe” from “elevated.”
While it’s expected that these advanced AI models will eventually help enhance cybersecurity, in the short term they provide a technological advantage to attackers, “enabling them to discover vulnerabilities and execute cyberattacks with increased speed, scale and sophistication,” it said.
Additionally, the ESRB noted that the concentration of leading AI providers in the U.S. exposes the European Union to “strategic dependency and geopolitical risks.”
In response, it’s calling on the EU — including tech firms, financial institutions and policymakers — to step up its “capacity, expertise and strategic autonomy” in AI tools.
At the same time, the European Supervisory Authorities — which includes securities, banking and insurance and pension regulators — endorsed the warning, stressing that “AI-enabled cyber-attacks could undermine the operational resilience of financial entities.”
In this environment, the regulators called on financial firms to bolster their cybersecurity capabilities — and said they’re working with other policymakers “to ensure that financial entities across the EU proactively identify and mitigate these risks.”
They also said they’re working with external technology providers to manage the risks and ensure the resilience of the financial sector.