The rapid growth of generative artificial intelligence has created a looming cybersecurity risk for the banking sector, the Federal Reserve’s vice chair for supervision, Michael Barr, warned Thursday.
As use cases for generative AI continue to evolve, “an arms race between those who are using generative AI to attack and those who are trying to use generative AI to block the attack” will ensue in the financial sector, Barr said during a live-streamed cyber risk conference held by the Federal Reserve Bank of Cleveland.
“Technology is always evolving, and so we have to keep up with the next threat. Generative AI could be a really important new concept for the economy, for finance, for really many aspects of economic life. And as with any new technology, it will have risks,” he said.
Barr said it is critical for financial institutions to make investments in generative AI to safeguard against cyberattacks.
“There’s a real risk that we have a cyber arms race using generative AI with defenders and attackers in a constant struggle,” Barr said. “So we do need to make sure that we are, and banks are, investing in…
