The Financial Stability Board has published the final version of its report on Sound Practices for Responsible Adoption of Artificial Intelligence, setting out 12 practices for financial institutions. The report follows a consultative draft released in June 2026 and reflects the public feedback it drew. An overview of the responses was released alongside it.
The stated aim is to help firms capture the benefits of AI while managing its risks in ways that support the resilience of the financial system. The catch is in the scope. The document deals with how institutions govern and control the AI they use, not with the finances of building it.
Two groups of practices
The mechanics here split the 12 practices into two groups. The first concerns governance across the whole organization. The board and senior management are expected to set and oversee how AI adoption lines up with the firm’s business model, risk appetite and strategy. The group also calls for a governance framework with clearly defined roles, AI risks folded into existing risk management, proper documentation of where AI is used, and continuous learning and adaptation.
The second group is about managing risk through the life of an AI system, from development to deployment. It covers:
- assessing the materiality and risks of each use case at the start and afterward;
- choosing suitable AI technologies;
- data governance;
- explainability, with compensating controls where needed;
- evaluating how use cases perform;
- human oversight;
- AI-related cyber and ICT risks;
- risks from third-party AI dependencies.
How the FSB expects firms to use them
The FSB describes the practices as a toolkit that institutions can tailor to their own context and risk profile and fold into existing frameworks, including those for cyber and third-party risk. The report includes case studies of benefits firms have reported and how some applied the practices in proportion to their size and risk. It strongly encourages boards and senior management to refer to them when refining AI governance, risk management and controls.
The practices also aim to promote coordination and information-sharing among institutions, supervisors and other stakeholders within and across jurisdictions. They build on, and are broadly compatible with, other work by the FSB and standard-setting bodies.
The board, in turn, is a body of national authorities from 24 countries and jurisdictions, chaired by Andrew Bailey, Governor of the Bank of England. It says it will monitor developments and update the sound practices as needed as AI technologies and applications evolve.
Sources
- Artificial intelligence
- FSB finalises sound practices for the responsible adoption of artificial intelligence (AI)
- What My Son Is Learning From Artificial Intelligence
Photo: PiDatacenters (CC BY-SA 4.0)
