The AI Threat to the Financial System

Artificial intelligence (AI) threatens the banking system from a number of directions, according to an article by Chris Skinner ¹. Putting the risk that there is an AI bubble to one side, there are three additional areas of risk: 

• If all institutions rely on the same foundation large language models, the same cloud providers, the same software and perhaps even the same autonomous AI agents, diversity disappears and a mistake made by one machine becomes a mistake made by thousands.
• If the starting point is that markets survive because investors and institutions think and behave differently, then AI may lead to everyone thinking the same. What happens to markets then?
• Today’s cyber criminals have to spend time seeking out weaknesses. Frontier AI models may automate this, allowing criminals to discover vulnerabilities across thousands of systems almost instantly.