# Machado speech: 'Technology is neutral, governance is not' (Feb 2026): Technology is neutral, governance is not: AI adoption in the banking sector — speech by Pedro Machado

Source: https://www.bankingnewsai.com/ai-regulation/documents/ecb-machado-technology-neutral-governance-speech-2026
Last updated: Aug 26, 2026

On 24 February 2026 Pedro Machado, ECB representative to the Supervisory Board, delivered 'Technology is neutral, governance is not: AI adoption in the banking sector' at the KPMG RiskTech Conference in Frankfurt. He reported that more than 85% of large European banks use AI, with generative and agentic AI accelerating in IT operations, legal and document analysis and front-line applications, and set three governance expectations: clear accountability for AI decisions, senior-management oversight matching AI's strategic importance, and effective challenge from risk, compliance and internal audit. Risk-management focus areas are explainability, lifecycle model governance and drift, data quality, and third-party risk, aligned with DORA, the AI Act, MiCAR and the DSA.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [ECB](https://www.bankingnewsai.com/ai-regulation/ecb) |
| Type | Speech |
| Status | Final |
| Published | Feb 24, 2026 |
| Applies to | No obligations; the most detailed public statement of ECB supervisory expectations for AI governance at significant institutions. |
| Official text | https://www.bankingsupervision.europa.eu/press/speeches/date/2026/html/ssm.sp260224~6c5b64a77a.en.html |

## Key points

- More than 85% of large European banks use AI; generative and agentic AI adoption accelerating
- Most common gen-AI use cases: IT operations (incident management, coding), legal/document analysis, front-line customer support, plus traditional credit risk, fraud and transaction monitoring
- Three governance expectations: accountability for AI outcomes, senior-management oversight, independent challenge by risk, compliance and internal audit
- Risk-management focus: explainability for decision-makers, lifecycle model governance and drift monitoring, AI-specific data quality, third-party risk
- Banks are accountable for outcomes regardless of how the technology performs — 'technology is neutral, governance is not'
- Under Priority 2 of the 2026–28 priorities the ECB will monitor general AI use and take a more targeted approach to generative AI
- Expectations anchored in DORA, EU AI Act, MiCAR and the Digital Services Act

## What changed for banks

The speech is the closest thing to an ECB AI governance standard: it tells boards what the second and third lines must do for AI, and confirms that the ECB judges AI through accountability and control quality rather than technology choice.

## Use cases it governs

- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)
- [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors)

## FAQ

### What does the ECB expect from bank boards on AI governance?

Per Machado's February 2026 speech: clear accountability for AI decisions, senior-management oversight proportional to AI's strategic role, and robust challenge from risk management, compliance and internal audit, plus explainability, lifecycle model governance, data quality and third-party controls.

## Related documents

- [ECB 'Dear CEO' letter on AI-enabled cybersecurity threats (SSM-2026-0301)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-letter-ai-enabled-cybersecurity-threats-2026) — Addressing AI-enabled cybersecurity threats — letter from the Chair of the Supervisory Board to CEOs of significant institutions (Jul 7, 2026)
- [Elderson speech: 'Strengthening operational resilience for the age of AI' (June 2026)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-elderson-operational-resilience-age-of-ai-speech-2026) — Strengthening operational resilience for the age of AI — speech by Frank Elderson (Jun 3, 2026)
- [Montagner speech: 'Encouraging innovation, managing risks' (Feb 2026)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-montagner-digital-transformation-speech-2026) — Encouraging innovation, managing risks: the ECB's approach to digital transformation — speech by Patrick Montagner (Feb 3, 2026)
- [Supervision Newsletter: AI use cases for credit scoring and fraud detection (Nov 2025)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-supervision-newsletter-ai-credit-scoring-fraud-2025) — AI's impact on banking: use cases for credit scoring and fraud detection (Supervision Newsletter, November 2025) (Nov 20, 2025)
- [SSM supervisory priorities 2026–28](https://www.bankingnewsai.com/ai-regulation/documents/ecb-ssm-supervisory-priorities-2026-28) — ECB Banking Supervision: SSM supervisory priorities for 2026–28 (Nov 18, 2025)
- [Machado speech: 'Artificial intelligence and supervision: innovation with caution' (Oct 2025)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-machado-ai-and-supervision-speech-2025) — Artificial intelligence and supervision: innovation with caution — speech by Pedro Machado (Oct 14, 2025)
- [ECB Guide to internal models (July 2025, ML section)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-guide-to-internal-models-2025-machine-learning) — Revised ECB Guide to internal models — expectations for machine-learning techniques in internal models (Jul 28, 2025)
- [ECB Guide on outsourcing cloud services](https://www.bankingnewsai.com/ai-regulation/documents/ecb-guide-outsourcing-cloud-services-2025) — ECB Guide on outsourcing cloud services to cloud service providers (Jul 16, 2025)

Last reviewed Aug 26, 2026. Cite the official text (https://www.bankingsupervision.europa.eu/press/speeches/date/2026/html/ssm.sp260224~6c5b64a77a.en.html) for the rule and this page for the summary and dates.

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