KEY FACT: Central banks of BIS membership are increasingly turning to generative AI technologies to bolster their cybersecurity defenses, marking a significant shift in their approach to safeguarding financial systems. This retooling effort involves integrating advanced AI capabilities to detect, predict, and neutralize cyber threats with unprecedented speed and accuracy.
Created on Corel Paint, Image source: BIS building
Central Banks Adopt Generative AI for Enhanced Cyber Security
Generative AI as a class of artificial intelligence systems designed to create new content and data by learning patterns from existing datasets, has made significant inroads into various sectors and institutions, offering innovative solutions and improvements. It represents a transformative technology with vast potential across multiple sectors.
The emergence of generative AI models, which gained significant momentum with the launch of ChatGPT in late 2022 unveiled opportunities for banking improvements as well as challenges for the management of cyber risk in the financial sector. On the other hand, gen AI has been proven to strengthen cyber security by enabling the processing of increasingly larger data sets with more sophisticated analytics. It could also help users employ more proactive cyber security and fraud prevention strategies.
On the other hand, there are emerging specific threats including AI-generated social engineering, zero-day attacks, and malware attacks for data leakage. The adoption of gen AI for internal organization purposes and potentially also for cyber defense also creates the risk of attacks against AI systems directly.
In a recently released BIS Paper No 145, the Bank for International Settlements (BIS), an international financial institution comprising 63 central banks and monetary authorities, has expressed its belief in the potential for widespread adoption of generative artificial intelligence (AI) for cybersecurity. BIS members include the central banks of prominent economies such as Australia, Belgium, China, France, India, Italy, Japan, South Korea, Switzerland, and the United Kingdom, among others.
Source: BIS Papers No 145
In a survey of 32 central banks of BIS membership, assessing their interest in adopting generative AI tools for cybersecurity, the report indicates that 71% are already using it and more planning to follow.
“Over two-thirds (71%) of respondents are already using gen AI, and 26% have plans to incorporate such tools into their operations within the next one to two years.”
Adoption of generative AI in central banking, as a percentage of respondents. Source: BIS
The BIS report predicts that all its members will adopt generative AI to enhance their internal cybersecurity measures. The report also revealed that Central banks that have already implemented generative AI have praised its effectiveness in detecting cyber threats compared to traditional tools.
Effectiveness of generative AI for defense against cyber threats. Source: BIS
Experts foresee that AI tools will improve cyber threat detection and reduce response time to cyber attacks. Central banks unanimously believe that adopting generative AI tools can eventually replace cybersecurity staff for conducting routine tasks, thereby freeing up resources for other initiatives. Though there are imminent related risks of social engineering attacks and unauthorized data disclosure, central banks anticipate a need for substantial investments in human capital, especially in staff with expertise in both cyber security and AI programming. Thus, as respondents expect generative AI to automate various tasks, they also expect it to support human experts in other roles, such as oversight of AI models.
By leveraging the power of generative AI, central banks aim to enhance their resilience against sophisticated cyberattacks, protect sensitive financial data, and ensure the stability of global financial markets. This innovative adoption will not only strengthen their cybersecurity posture but also set a new standard for technological advancement in the financial sector.
Do you think the Central banks and BIS are on the right path?
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