EBA, EIOPA and ESMA call for stronger governance and consistent supervision as growing reliance on frontier AI models creates new systemic ICT risks across the financial sector

The European Supervisory Authorities warn that dependence on a small number of powerful external models could expose banks, insurers and investment firms to common vulnerabilities, service disruption and weaknesses that spread across sectors. They recommend a risk-based supervisory approach covering model governance, third-party dependencies, resilience testing and coordination between authorities, rather than allowing firms or sectors to manage frontier-model risks in isolation…