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London – Global regulators are calling for tighter controls on increasingly autonomous artificial intelligence (AI) systems within the financial sector, warning that they pose escalating risks to stability. The Financial Stability Board (FSB) issued a report on Wednesday highlighting the potential for AI to amplify existing vulnerabilities and create new ones as its adoption continues to accelerate.

The FSB, an international body that monitors and makes recommendations about the global financial system, has “strongly” encouraged boards of financial institutions to implement safeguards. These safeguards are designed to mitigate the risks associated with AI, particularly as financial firms increasingly rely on AI for tasks ranging from risk assessment and fraud detection to trading and customer service.

The report specifically addresses the growing use of “agentic AI,” a form of AI that can independently make decisions and take actions. While agentic AI offers potential benefits in terms of efficiency and innovation, the FSB believes it also presents unique challenges. The ability of these systems to operate with limited human oversight raises concerns about accountability, transparency, and the potential for unintended consequences.

The FSB’s recommendations include enhanced risk management frameworks, robust data governance practices, and ongoing monitoring of AI systems. They also emphasize the importance of ensuring that AI models are explainable and that their decisions can be understood and challenged. The report acknowledges that the financial sector is already deploying AI extensively, and that the pace of innovation is likely to increase.

This call for action comes as regulators worldwide grapple with how to manage the risks associated with AI. The FSB’s report is expected to inform policy discussions and shape regulatory approaches in the UK and other major financial centres. The aim is to harness the benefits of AI while safeguarding the stability of the global financial system.