Bank of International Payments flags AI risks for central banks amid rising banking AI adoption

The Bank of International Payments (BPI) released a report warning that the rapid growth of artificial intelligence (AI) could increase the likelihood of policy errors by central banks. The paper notes that AI may affect key monetary indicators such as natural interest rates and unemployment, potentially pushing short‑term inflation higher before productivity gains lead to deflationary pressure. It cautions that over‑optimistic expectations about AI could result in mis‑allocation of resources, asset‑price bubbles and tighter financial conditions, urging a gradual, data‑driven monetary approach. The European Central Bank is cited as supporting a cautious stance to minimise risks to financial stability.

Separately, a regional AI‑maturity ranking of 20 Latin American banks placed Brazil's Nubank at the top, highlighting its large AI‑specialist workforce and projects like the Nuformer risk‑modeling tool. Among Colombian banks, Bancolombia ranked sixth, noted for a partnership with Appian that cut manual document processing by 70 %, while Davivienda and Banco de Bogotá took 13th and 14th places respectively, scoring well in leadership and talent metrics. The study, compiled by Evident, underscores how banks across the region are moving AI from pilot phases into operational use.