Financial Stability Board finalises 12 sound practices for responsible AI adoption by financial institutions

The Financial Stability Board (FSB), which coordinates the work of national financial authorities and international standard-setting bodies, published its final report on Sound Practices for Responsible Adoption of Artificial Intelligence on 15 October, after a public consultation that began in June 2026. The report sets out 12 sound practices in two groups. The first covers organisation-wide AI governance: the role of the board and senior management in aligning AI adoption with business model, risk appetite and strategy; clear roles and responsibilities; bringing AI risks into the risk management framework and documenting AI use; and continuous learning. The second covers risks across the AI lifecycle: assessing the materiality and risks of AI use cases, choosing appropriate AI technologies, data governance, explainability and compensating controls, evaluating performance, human oversight, AI-related cyber and ICT risks, and risks from third-party AI dependencies. The FSB describes the practices as a practical toolkit that institutions can tailor to their context and fold into existing frameworks, and it "strongly encourages" boards and senior management to refer to them. It will update the practices as AI evolves.

What it means for business: the sound practices are not binding rules, but banks, insurers and other financial firms may want to check their AI governance, model risk and third-party AI arrangements against them, as national supervisors may draw on them.