Artificial intelligence is transforming businesses, financial markets and everyday life—but its rapid development is also creating serious new risks.

Bank of England governor Andrew Bailey has warned G20 finance ministers and central bank governors that advanced frontier AI models could pose a growing threat to global financial stability. The warning focuses on AI-powered cyberattacks, dependence on a small number of technology providers and the possibility of an AI investment downturn affecting markets.

01

Why is the Bank of England concerned?

Frontier AI models are the most advanced artificial intelligence systems currently available. They can reason, solve complex problems, use digital tools and complete tasks with less human supervision. These abilities can help businesses become more productive, but they can also be misused.

According to the Financial Stability Board, advanced AI could dramatically increase the speed, scale and cost-effectiveness of cyberattacks. Criminals may use AI to discover weaknesses, create convincing scams or automate attacks against banks and other essential services.

02

A cyberattack could spread quickly

Banks, insurers and financial companies often rely on the same major cloud, software and AI providers. This creates concentration risk: if one widely used provider suffers a serious cyberattack, technical failure or AI-related incident, disruption could spread across multiple financial institutions.

The concern is not simply that AI might make one attack more powerful. A single incident could affect many connected organisations and damage public confidence in the financial system. Regulators therefore want stronger security, recovery procedures and operational resilience.

03

Could the AI boom become a financial bubble?

There is also concern about the enormous amount of money flowing into AI companies, infrastructure and data centres. Investor optimism has pushed the value of many AI-related businesses higher while some companies are using more debt to fund expensive projects.

If expectations become unrealistic or future profits fail to materialise, AI-related investments could experience a sharp correction. That would not mean the end of the AI industry, but it could create significant losses for investors and businesses exposed to the sector.

04

What does this mean for ordinary AI users?

For most people and small businesses, this warning is not a reason to stop using artificial intelligence. AI remains useful for researching ideas, producing content, automating repetitive work and building online businesses.

It is a reminder to use AI responsibly and keep people in control of sensitive or high-impact decisions.

  • Do not upload sensitive banking or customer information without checking how it is stored
  • Double-check AI-generated financial advice
  • Use strong passwords and two-factor authentication
  • Keep human approval in place for payments and important decisions
  • Be cautious of emails, calls and videos that could have been created with AI
05

The bigger picture

This warning shows how quickly the conversation around artificial intelligence is changing. Attention is moving beyond generated text and images towards autonomous agents, cybersecurity and the possibility that advanced models could affect entire industries.

The Financial Stability Board is calling for international cooperation so regulators, banks and technology companies can prepare together. AI is not disappearing. The challenge is capturing its benefits without creating vulnerabilities that businesses and governments are unprepared to manage.