On 9 April 2025, the Financial Policy Committee (FPC) published the latest in its series of papers called Financial Stability in Focus.

In this issue the FPC focuses on artificial intelligence (AI) in the financial system.

The FPC is considering the potential macroprudential implications of more widespread, and changing, use of AI in the financial system. In this context the FPC is focusing on the greater use of AI in banks’ and insurers’ core financial decision-making, the greater use of AI in financial markets and operational risks in relation to AI service providers. It is also considering the changing external cyber threat environment and that while AI might increase financial institutions’ cyber defensive capabilities, it could also increase malicious actors’ capabilities to carry out successful cyberattacks against the financial system. And financial institutions’ own use of AI could create new vulnerabilities that actors could exploit.

The FPC intends to build out its monitoring approach to enable it to track the development of AI-related risks to financial stability. The FPC plans to make use of a blend of quantitative and qualitative information sources including the regular Bank of England and Financial Conduct Authority survey on AI in UK financial services, the AI Consortium and targeted market and supervisory intelligence gathering.