The G20’s Financial Stability Board (FSB) have raised issues about the implications of artificial intelligence (AI) on the stability of the global financial sector.
In its recent report, the Board highlighted AI’s transformative potential and identified significant risks that could undermine financial system stability. It noted that though AI could enhance operational efficiency, personalize financial products, improve regulatory compliance, and enable advanced data analytics, it poses risks of over-reliance on third-party service providers, cybersecurity threats, model risks, and challenges with data governance.
A key concern raised in the report is the growing threat of AI-driven financial fraud. The FSB notes that generative AI technologies, such as deepfakes, could be misused to manipulate markets, create fraudulent financial products, and spread disinformation.
To address these risks, the FSB recommends enhanced monitoring of AI in the financial sector and calls for better data collection practices. The Board also urges regulators to collaborate more closely with private sector stakeholders, including developers, service providers, and academics, to ensure that AI systems operate within legal and ethical frameworks.
Furthermore, the FSB stresses the need for a comprehensive review of existing regulatory frameworks to better manage the risks posed by AI. It also calls for strengthened supervisory capabilities to oversee the use of AI in financial markets at both local and global levels.
Notably, lawmakers in the U.S., one of the premier members of the G20 nations, are leading a legislative effort to tackle the misuse of AI deepfakes. The proposed bill, named the Content Origin Protection and Integrity from Edited and Deepfaked Media Act (COPIED), is aimed at providing a proactive measure in addressing concerns surrounding the ethical use of AI, particularly in preventing the malicious manipulation of digital content. One of its notable provisions includes mandatory watermarking of any content produced by AI-powered services.
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