The Bank for International Settlements’ top official, Hyun Song Shin, has emphasized the transformative power of artificial intelligence in the financial sector, highlighting its potential to enhance economic forecasting, detect financial crimes, and improve payment systems. However, Shin also cautioned about the risks of AI, including amplified market volatility, cyber threats, and job displacement. To navigate these challenges, central banks must invest in new capabilities, forge closer partnerships, and share resources to mitigate risks. Shin’s call for a “community of practice” among central banks underscores the need for international cooperation to harness the full potential of AI.
AI Revolution in Finance – Opportunities and Risks for Central Banks
AI has moved from narrow systems that solve specific tasks to more general systems that deal with a wide range of tasks, and all in ordinary language rather than in specialized code.
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