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Fed official warns banks to bolster defenses against AI cyber risks
Federal Reserve Vice Chair for Supervision Michelle Bowman said banks should start with strong cyber hygiene, including patch management and phishing-resistant multifactor authentication.
Federal Reserve Vice Chair for Supervision Michelle Bowman warned banks on Sept. 29 to buffer their systems against artificial intelligence threats while also arguing that AI can improve lenders’ defenses. Bowman made the remarks in prepared testimony for an event in Colorado, describing AI as both a tool for threat actors and a component of security measures for banks.
Bowman previously said the Fed should not micromanage banks on issues like AI as U.S. officials weigh how the technology changes risk. Insurance Journal also noted that Bloomberg earlier this year reported regulators were pausing some cyber-related examinations to give banks time to strengthen protections against threats revealed by newer AI models.
To address the risks, Bowman pointed to defensive steps such as maintaining up-to-date asset inventories, using phishing-resistant multifactor authentication, tightening identity and access controls, and running robust vulnerability identification and patch management programs.
Bowman also emphasized that boards and bank leadership should proactively manage cybersecurity risk, according to her remarks as reported by Insurance Journal.