Bank regulators step up AI risk scrutiny amid fears of cyberattacks - The Arab Weekly

**Bank regulators step up AI risk scrutiny amid fears of cyberattacks**

Banking supervisors are intensifying their examination of how financial institutions deploy artificial intelligence, according to The Arab Weekly, as concerns grow that AI systems could widen the sector's exposure to cyberattacks. The shift reflects a broader recognition that AI tools now sit close to core banking functions — from fraud detection to credit scoring — and that their security and reliability carry systemic implications.

For markets, the development signals that regulatory expectations around AI governance are tightening. Banks may face more detailed questions about how models are tested, monitored and protected, and about the third-party vendors that supply them. Institutions with mature risk frameworks could be better positioned than those still in early stages of adoption.

What to watch: whether scrutiny translates into formal guidance or capital requirements, and how quickly banks adjust their AI oversight. For investors, the key variable is not the technology itself but the compliance burden it may attract — a factor that could influence costs and competitive dynamics across the sector over time.