Germany's finance watchdog to make targeted inspections amid 'substantial' AI risks

FRANKFURT, May 12 (Reuters) - ‌Germany's banking ​regulator ​BaFin warned on Tuesday that cyber risks were "growing" and "substantial" due to advances in artificial intelligence, ‌and announced a new division will conduct ⁠targeted inspections at financial firms.

The emergence of Anthropic's Mythos has ‌set up a scramble from ‌the global banking industry to gain access and test the technology as regulators rush to examine ​the cybersecurity risks the new artificial intelligence model raises and how prepared financial firms are to ⁠tackle them.

"These new AI models can identify many vulnerabilities in both new ​and existing IT systems with remarkable speed," said BaFin President Mark Branson.

"They will be ​able to exploit the vulnerabilities ‌they find ever more rapidly."

Branson said that the financial industry could afford to strengthen ⁠cybersecurity, calling it "an urgent and essential investment".

Mythos is viewed by cybersecurity experts as posing significant challenges to the banking ⁠industry and its legacy technology systems, prompting a series of ​warnings from regulators and policymakers. A string of U.S. banks have so far been given access to Mythos.

Branson said that ‌a new division will make targeted inspections of financial firms.

"Such 'IT spotlight' inspections take far ‌less time than fully-fledged reviews. We can therefore ⁠complete more of them ‌and thus respond ​more effectively to current developments and incidents," he said.

(Reporting by Tom Sims; Editing by Linda ‌Pasquini)

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