Fed's Bowman urges banks to guard against AI cyber threats

September 21, 2026 at 03:00 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Federal Reserve Vice Chair for Supervision Michelle Bowman said regulators are working to help banks, especially smaller ones, protect themselves from AI-driven cyber threats. She spoke on May 1 about the Fed's efforts to mitigate vulnerabilities from third-party AI products. The Fed has monitored banks' AI use for nearly a decade and sees increased adoption across all sizes.

Key Facts

Michelle Bowman, the Fed's vice chair of supervision, said regulators want to help banks, especially smaller ones, protect themselves from AI-related vulnerabilities.
The Fed has been monitoring banks' use of AI for nearly a decade and has seen a noticeable increase in AI adoption across banks of all sizes.
Bowman is working with the Federal Financial Institutions Examination Council to assist smaller banks and is engaging service providers including Mastercard and Visa.
The Financial Stability Board recently proposed practices for the financial services industry to integrate AI and help regulators supervise its use.

Regulatory Focus on AI Risks

The Federal Reserve is sharpening its focus on how banks use artificial intelligence to defend against cyber threats. Michelle Bowman, the Fed's vice chair of supervision, said regulators want to help banks, especially smaller ones, protect themselves from vulnerabilities introduced by third-party AI products. Bowman said the Fed regularly discusses AI with bankers at all levels of the Federal Reserve System, including direct conversations with individual banks. The Fed has monitored banks' use of AI for nearly a decade and has seen a noticeable increase in AI adoption across banks of all sizes.

Support for Smaller Banks

Only the largest and most systemically important banks have the ability to use frontier AI models to identify and mitigate risks, while smaller banks lack that capability. Bowman is working to assist smaller banks through the Federal Financial Institutions Examination Council, which she chairs. She is engaging service providers for smaller banks to ensure they maintain safe, compliant products and services. Bowman and regulators have also had conversations with core service providers, including Mastercard and Visa, and are working on the next iteration with cloud service providers.

International Coordination

The Financial Stability Board, an international body that monitors the global financial system, recently proposed practices for the financial services industry to integrate AI. These practices also help regulators supervise how financial institutions use AI and better focus their supervision. Anthropic's Mythos, an AI model that identifies cyber vulnerabilities, initially caught regulators' attention in April.