Financial Conduct Authority CEO Nikhil Rathi echoed these regulatory challenges during an interview with CNBC, stating that conventional policymaking cycles cannot handle technologies moving within weeks or months.
"Technology moves incredibly fast, and we need to think differently about some of the innovations that we are seeing on AI," told Rathi.
The FCA is collaborating with the Financial Stability Board and the U. K.
AI Safety Institute to balance innovation against financial crime and integrity risks.
"The reality is some of these technologies now move in weeks, or months, and the traditional cycle of rulemaking simply doesn't work in that way, so we need to think about new tools and a different way of working with the market in a more collaborative way, for example, on financial crime and AI risks, to be able to make sure we secure our objective of market integrity," said Rathi.
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The FCA aims to remain transparent about evolving market dangers without blocking commercial adoption.
"We don't want to stand in way of adoption but we need to be transparent about where risks lie," added Rathi.
European Central Bank President Christine Lagarde described AI as a double-edged sword that offers productivity gains but also introduces severe security vulnerabilities that require new defensive funding channels.
"For about a decade now we have been talking about cybersecurity risks, hacking, data theft and so on," said Lagarde.
The ECB president emphasized that the acceleration of these advanced models compounds existing operational risks.
