In a recent speech, Banque De France’s deputy governor, Denis Beau, discussed three critical areas for the prospective safety and efficiency of the financial sector – distributed ledger technology (DLT)-based finance, artificial intelligence (AI) and cyber risks.
On DLT, he noted that the development of tokenized finance is notably handicapped by the absence of a fully secure settlement asset. For AI, Beau punctuated that Europe has taken steps, such as the AI act, towards “trustworthy AI”.
“Financial supervisors will have to adapt their supervisory activities to ensure that financial institutions remain in control of the risks associated with their use of AI,” he said.
And he also flagged the quantum computing threat for cybersecurity: “This threat should prompt us to begin without delay a gradual transition to quantum-resistant cryptographic solutions,” Beau said.
Operational resilience
In Europe, the recently enacted Digital Operational Resilience Act (DORA) complements the sectoral regulations with specific rules on operational resilience and IT risk management and aims to reconcile open data and risk management.
“Supervisors will play a central role in facilitating and overseeing this exchange of information between stakeholders. In this way, regulation will act as a facilitator, to improve operational resilience and IT risk management,” said Beau.