Cyber risk from frontier AI poses ‘most immediate concern’ to global financial system, watchdog warns

The cyber risk posed by frontier AI is the “most immediate concern” facing the global financial system, ministers and central bank governors from the world’s largest economies were warned in a letter published Monday.

Andrew Bailey, chair of the Financial Stability Board, called on financial institutions and technology providers to “prepare for more severe scenarios involving simultaneous disruption across multiple firms or shared technology dependencies.”

The FSB was created by the G20 after the 2008 financial crisis to monitor risks that could spread across borders. Its warning follows cybersecurity evaluations at OpenAI, Anthropic, Meta and the UK’s AI Security Institute that have resulted in advanced models engaging in unauthorized activities targeting third-party systems.

Those incidents come as security agencies assess AI could make it faster and cheaper to find and exploit vulnerabilities. The FSB letter echoes a warning by Britain’s National Cyber Security Centre of increased operational risks if organizations fail to keep pace with an accelerated patching cycle.

While there has been an observable increase in the number of patches issued by companies such as Microsoft, widespread exploitation of those newly disclosed flaws has not yet been observed.

Bailey’s letter, released ahead of a G20 meeting in Asheville, North Carolina, said the financial system’s dependence on “highly concentrated third-party service providers” increased the danger of a system-wide disruption.

The watchdog stressed “the importance of robust response and recovery capabilities, including the ability to restore critical systems and data from ‘bare metal’ following a significant cyber incident.”

Britain’s latest annual National Risk Register describes a similar worst-case scenario in which a sophisticated cyberattack targets financial infrastructure and overwrites data on hard drives.

Under that scenario, restoring systems could take years. A loss of confidence in account balances and transaction records could also trigger widespread withdrawals and threaten the stability of the financial system.

Bailey said the FSB is also examining how financial services companies can safely deploy frontier models for defensive purposes, while warning that advances in AI capabilities must be matched by stronger resilience and preparedness.

The FSB warned that many countries still lack safeguards governing the development, release and deployment of advanced AI models. Bailey said closing those gaps should be a global priority and called for coordinated measures to support the safe and responsible release of advanced models.

The warning comes as the broader economic effects of AI remain uncertain. Its clearest impact so far has been a surge in technology investment, with estimates putting AI-related spending at between 1.8% and 5% of U.S. gross domestic product, depending on how it is measured. Beyond that investment boom, analysts say evidence of productivity gains remains limited.