Key facts
- Banks need 'bare metal' recovery options due to AI-enabled cyber attacks.
- AI advancements pose a systemic risk to global financial infrastructure.
- Regulators are increasing efforts to contain growing AI risks.
Bank of England Deputy Governor Sarah Breeden stated on Thursday that banks must prepare for 'bare metal' recovery options, as AI-enabled cyber attacks pose an increasing threat. She warned that AI advancements have reached a point where they represent a 'systemic risk' to global financial infrastructure. Breeden emphasized that traditional cyber defenses may no longer be sufficient and that banks need to consider end-to-end recovery strategies for core services. Banking regulators worldwide are intensifying efforts to manage AI-related risks, with UK supervisors encouraging major banks to examine their bare metal recovery plans. Breeden highlighted that robust cyber hygiene is more critical than ever, expressing concern about potential paralyzing attacks on systemically important banks or infrastructure.