The artificial intelligence (AI) technology has proven to be a transformative force in the financial sector by automating most of the accounting practices.
A study conducted by the Bank for International Settlements (BIS) to examine AI adoption in banks demonstrated that central banks are embracing this advanced technology to enhance the security of the financial system.
AI Adoption in Banks
The BIS used the survey method to gather reliable and accurate data from the central banks. The survey targeted 32 central banks to examine the implication of AI generative tools on the banking system.
The study aimed to assess the number of central banks leveraging the power of AI to improve cybersecurity. The BIS observed that ⅔ of the respondents had implemented AI generative tools in running the central bank activities.
The study shows that ⅓ of respondents were unwilling to use AI tools in their operation for the next two years.
From the survey findings, the BIS predicted that the AI evolution would compel most of the central banks to change their mind and embrace artificial intelligence in strengthening cybersecurity measures.
Growing Adoption of AI Tools
During the survey, the BIS noted that central banks using AI to mitigate cybersecurity attacks boasts of reducing cybersecurity threat. Unlike the traditional tool, the AI tool is effective and reliable in cyber security detection.
The BIS noted that the changes in the financial landscape have encouraged bad actors to shift their focus to this industry. To prevent financial losses, banks have invested in acquiring AI tools with enormous potential to detect any suspicious financial transaction.
The banks that have excelled in enhancing their cybersecurity measures using AI boast of having prevented numerous crimes. Even though AI has proven to be an effective tool in addressing cyber-related crime, some of the central banks still need to catch up due to the cost of obtaining these devices.
Changes in the Banking System
The BIS noted that lately, social engineering and zero-day exploits are becoming common. The financial regulators noted that criminals are advancing their skills to disclose vital information to the public.
Despite the benefits of AI in strengthening cybersecurity measures, the central bank fears that artificial intelligence will lead to job displacement in the future.
The central banks project that AI development will replace the cybersecurity staff. On the contrary, the BIS anticipates that AI development will enable companies to redirect resources to more promising opportunities.
A review of the BIS website demonstrates that the members include 64 central banks from Australia, the UK, Italy, Japan, and other countries.
The BIS has joined some of the central banks to create the digital version of the national currency. Also, the BIS is currently supporting the central banks in tokenizing real-world assets (RWA).
