The Financial Stability Board (FSB), the international body that monitors and makes recommendations about the global financial system, has published a consultation report outlining 12 sound practices for the responsible adoption of artificial intelligence by financial institutions.
The report covers three broad areas: organisation-wide AI governance spanning practices one to four; the management and mitigation of AI risks across the various stages of development and deployment, covered by practices five to ten; and the handling of AI-related cyber, information and communication technology, and third-party risks addressed in practices 11 and 12.
The FSB has stressed that the sound practices are not intended to create a new international standard or to prescribe a fixed approach to AI adoption, nor are they designed to steer business decisions towards any particular technology. The body has also noted that the practices were not developed specifically to address risks tied to frontier AI models, though several of them would support financial institutions in responding to such risks.
The FSB has encouraged boards and senior management at financial institutions to draw on the framework when considering business strategy, technology adoption, and risk management as the financial sector becomes increasingly AI-driven. The practices are designed to be broadly compatible with existing work by the FSB and other standard-setting bodies, and are intended to support coordination, cooperation, and information-sharing among financial institutions, supervisors, and other stakeholders across jurisdictions.
FSB Standing Committee on Supervisory and Regulatory Cooperation chair and Federal Reserve System of the United States of America Board of Governors vice chair for supervision Michelle Bowman said, “This report establishes clear safeguards for financial institutions to adopt, innovate, and use AI responsibly. The report reflects significant collaboration among FSB members on an accelerated timeframe to keep pace with the rapid changes from advancements in AI. I look forward to receiving public feedback on this report, so that a final report can be issued later this year as a US G20 deliverable.”
FSB SRC Workstream on Artificial Intelligence lead and Monetary Authority of Singapore deputy managing director Ho Hern Shin said, “The recent developments in frontier AI models highlight the dynamic nature of this technology and the rapid pace at which its capability evolves. The FSB’s sound practices are designed to help financial institutions navigate their AI adoption responsibly in a rapidly changing technology landscape.”
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