Artificial Intelligence (AI) is widely regarded as one of the technologies with the greatest potential to transform the financial sector. It is increasingly used by both fintechs and established financial institutions to enhance operational efficiency and strengthen risk management and compliance. Recent advances, including generative and agentic AI systems, combined with expanded access to cloud computing infrastructure providing scalable computing power and data storage, are expected to accelerate deployment across a broader range of use cases, including fraud detection, trading, client interaction and personalised services.

Further progress, however, depends on improvements in data quality, accessibility and standardisation. AI also raises challenges related to model reliability, explainability, bias and fairness, as well as data protection and accountability.

The EU has established a comprehensive regulatory framework with the entry into force of the AI Act in August 2024. The Act adopts a risk-based approach, setting out specific requirements for “high-risk” systems related to governance, documentation, risk management and human oversight, while imposing targeted transparency requirements for other AI systems. In the financial sector, high-risk use cases include AI systems used for creditworthiness assessment and credit scoring of natural persons, as well as risk assessment and pricing in life and health insurance. These requirements will apply from 2026. The framework also introduces specific provisions for general-purpose and generative AI models, including transparency obligations, safeguards on training data and measures to prevent the generation of illegal content.

At the international level, several initiatives have established principles and frameworks for the use of AI, including the OECD Principles for trustworthy AI adopted in 2019. The FSB, BIS and IOSCO are also addressing the implications of AI for financial stability and market functioning. In parallel, regulatory and supervisory approaches have been developed in major jurisdictions such as the UK and Japan, based on principles or guidelines, and in the United States through sectoral regulatory frameworks.