Europe watchdogs warn of rising cyber threats as AI accelerates risks

After US and Uk, Europe's market watchdogs also warns of growing cyber threats as AI speeds up risks.

The chief of Europe’s securities regulator said the risks from and potential speed of cyberattacks are growing, joining a chorus of warnings from financial supervisors on the threats posed by artificial intelligence models that are evolving quickly.

Geopolitical tensions have ‌increased cybersecurity risks and the regulator has been contacting financial entities it supervises to assess their cybersecurity defences in light of recent developments in AI, Verena Ross, chair of the European Securities and Markets Authority, said in an interview in Paris.

"We are closely watching how bringing AI models into this could increase the potential speed with which such attacks could happen," said Ross.

The financial sector has been rattled this month by reports, that a new AI model, Mythos, made by U.S. AI company Anthropic, can find and exploit previously undiscovered cybersecurity vulnerabilities in IT systems.

Regulators too are grappling with the challenges of keeping pace with the changes, according to Ross.

"We collectively between the national and the EU level need to up our game to try to ensure that we have the capability to properly look at what financial entities are doing in this space and that we also build up our expertise so that we can oversee the critical third party providers," Ross said.

ESMA, with two other European Union regulators, in November named 19 technology companies considered critical third-party providers to the bloc's finance industry, as part of new regulation to improve tech resilience. 

Ross declined to comment on whether AI providers could be added to the group of critical providers at a later date.

Cyber risk is one underlying vulnerability that could coincide with a reassessment of valuations of financial assets, Ross said.

Stock markets in the U.S. and elsewhere are near all-time highs, boosted by large ‌tech companies which carries potential cyber risks amid advanced technology or AI push.