Namaste Yogis. Welcome to the Blockchain & AI Forum, where your technology questions are answered! Here no question is too mundane. As a bonus, a proverb is also included. Today’s question comes from Felipe and he asks whether central bankers view AI as a friend or a foe?
Felipe, you came to the right place. AI is poised to affect our daily lives in ways we cannot fully anticipate. However, I suspected central bankers have been pondering what AI might mean for their operations for some time. That’s why I turned to Bank for International Settlements (BIS) for answers to your question. Before I share their assessment, a few words about the BIS.
The BIS is located in Switzerland. Its mission is to support central banks’ pursuit of monetary and financial stability through international cooperation, and to act as a bank for central banks. To fulfill its mission the BIS conducts extensive research on emerging banking trends, including technology. To no surprise I discovered a recent BIS report, titled: Generative Artificial Intelligence and Cyber Security in Central Banking. https://www.bis.org/publ/bppdf/bispap145.pdf Let’s examine the report.
BIS conducted a survey of central bank chief information security officers. Thirty-two responded. The purpose was to investigate the link between generative AI and cyber risk and to identify the opportunities and challenges that central banks see in the adoption of generative AI tools. According to BIS, the survey was guided by four broad considerations:
1) What is the current status of generative AI adoption by central banks?
2) How do central banks evaluate the benefits and challenges for cyber security associated with the use of generative AI?
3) How prepared are central banks for the “AI revolution” and its expected impact on cyber security and data protection?
4) What are the key strategic, ethical and regulatory concerns regarding generative AI adoption in cyber security?
The findings are below:
Generative AI is Already Here. The large majority of central banks report are using generative AI tools or are planning to do so soon. Respondents indicated that generative AI offers more benefits than risks, especially with regard to cyber threat detection.
Generative AI Can Outperform Existing Systems but Comes with Risk. The benefits are largely related to automation of routine tasks traditionally performed by humans. However, they also include enhanced threat detection, faster response times to cyber-attacks, learning new trends, and anomalies or correlations that might not be obvious to human analysts. What about the risk? AI can introduce new vulnerabilities into central banks’ cyber security defenses related to social engineering and zero-day attacks as well as unauthorized data disclosure, are the BIS’ findings.
Employees Preparation. A general concern is whether bank personnel have sufficient knowledge of AI methodologies and cyber security. The “good news” is thatgenerative AI could replace staff in cyber security for routine tasks and this shift could free up resources to be reallocated towards more strategic cyber security initiatives, potentially increasing productivity. Nevertheless, AI requires human supervision to ensure ethical and accurate outcomes and continuously train the AI systems.
Reactive to Proactive. Survey respondents agree generative AI systems will facilitate a shift from a reactive to a proactive approach to predicting and neutralizing threats. A critical consideration is the extent of autonomy to be granted to AI tools in cyber security and the nature of their interaction with humans.
On balance central bankers are committed to AI but will proceed with caution.
I end with a proverb from Belarus: “the sun will look into our window also”.
Until next time,
Yogi Nelson
Blockchain & AI Forum 