With the rise of frontier artificial intelligence models, financial institutions and third-party technology providers should prepare for a cyber threat environment marked by more vulnerabilities and faster software patching, Financial Stability Board Chair George Bailey said in a letter to the G20 Finance Ministers and Central Bank Governors.
The G20 FMCBG is scheduled to meet today and tomorrow in Asheville, North Carolina. In a letter submitted ahead of the hearing, Bailey said frontier AI has the potential to drastically alter the speed and economics of cyber risks, which could undermine market confidence, “especially due to highly concentrated third-party service providers.”
While the technology also offers “significant opportunities” for cyber defense, “recent developments highlight the importance of ensuring that advances in capability are matched by resilience and preparedness,” he said.
“Financial institutions, financial market infrastructures and technology providers will therefore need to strengthen vulnerability management, response and recovery capabilities, and prepare for more severe scenarios involving simultaneous disruption across multiple firms or shared technology dependencies,” Bailey said.
“These developments reinforce 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, as well as the importance of resilience amongst critical third-party technology providers and other common service providers, on which the financial system depends,” he added.
