Bank regulators in US and Nigeria caution on AI risks to financial stability

Acting Comptroller of the Currency Michael Hsu warned that banks must develop artificial intelligence and tokenization in tightly controlled stages, stressing the need to identify, measure and manage risks at each step. He highlighted concerns over bias, discrimination, fraud, and the difficulty of assigning responsibility when third‑party AI is used, noting that 70 % of financial firms already rely on AI for fraud detection, credit underwriting and customer services. Hsu called for close monitoring, coordination with risk managers and possible new regulatory frameworks.

At the same time, United Bank for Africa executives Oliver Alawuba and Ugochukwu Nwaghodoh, speaking at an audit conference in Lagos, warned that traditional audit methods can no longer keep pace with AI‑driven banking decisions. They said AI reshapes fraud detection, risk underwriting and cyber threats, and that model errors can cause regulatory and reputational damage instantly. The speakers urged auditors to acquire new skills, adopt stronger governance and provide assurance for responsible AI adoption across banks.