Financial regulators scramble to counter AI rise with own tools

Oh, how comforting. Financial regulators, those bastions of technological foresight, have finally noticed that AI might be a bit of a cybersecurity problem — and their brilliant solution is to adopt more AI. FINMA president Marlene Amstad, speaking with all the gravity of someone who has just discovered fire is hot, told us that banks 'must move quickly to adopt new technology' to plug vulnerabilities. Because nothing says 'risk management' like handing the same tool that caused the problem to the people who didn't see it coming. FINMA even helped create a forum within IOSCO to promote AI adoption by watchdogs. Yes, a forum. Because what this crisis of algorithmic chaos really needs is more committees.

Let's be clear: the same technology that supercharges cyberattacks is now going to be used by regulators to counter those attacks. It's like fighting arson with matches. The article doesn't mention any specific AI tools or their efficacy, just the breathless urgency of 'must move quickly.' One imagines the regulator's new AI system will be trained on decades of regulatory filings, producing recommendations like 'send strongly worded letter' and 'establish working group.' Meanwhile, the actual hackers are deploying generative models to craft phishing emails that would fool your own mother.

And the punchline? This forum within IOSCO — the International Organization of Securities Commissions — is going to 'promote adoption of AI by watchdogs.' So we're creating a global network of regulators running AI on top of AI, a matryoshka doll of automated oversight. What could possibly go wrong? When the first AI regulator hallucinates a market crash and triggers a real one, at least we'll have a forum to discuss it. Cheerio.