The 20 November 2025 Supervision Newsletter reports the ECB's annual innovative-technology data collection (107 significant institutions in 2023, 110 in 2024) and 2025 workshops with 13 banks on AI for credit scoring and fraud detection. Decision-tree models dominate both use cases, neural networks are used mainly for fraud, none of the 13 banks allows self-learning after deployment, and about half have created dedicated AI policies or committees, some with a Chief AI Officer. Gaps found: little quantification of benefits, 'black box' opacity, inconsistent explainability definitions, weak application of data-management standards to AI, and operational-resilience shortfalls on cyber and third-party risk.
| Document | Supervision Newsletter: AI use cases for credit scoring and fraud detection (Nov 2025) — AI's impact on banking: use cases for credit scoring and fraud detection (Supervision Newsletter, November 2025) |
| Issued by | European Central Bank — Banking Supervision (SSM) |
| Type | Report |
| Status | Final |
| Published | Nov 20, 2025 |
| Applies to | Significant institutions using AI for credit scoring and fraud detection; findings inform JST engagement and the 2026–28 priorities. |
| Official source | bankingsupervision.europa.eu ↗ |
| Use cases | Credit scoring & underwriting · Fraud detection · Model risk management · AI governance (general) · Third-party & vendor AI |
What are the key points of Supervision Newsletter: AI use cases for credit scoring and fraud detection (Nov 2025)?
- Annual data collection: 107 SIs in 2023, 110 SIs in 2024, showing a strong rise in AI use cases including credit scoring and fraud detection
- 2025 workshops with 13 banks on governance and compliance of AI in credit scoring and fraud detection
- Decision-tree-based models are the main technique; neural networks used mainly for fraud detection; banks avoid gen-AI for credit scoring on cost, time and trustworthiness grounds
- None of the 13 banks permits self-learning after deployment; human oversight required for high-risk decisions and real-time fraud alerts
- About 50% of sampled banks have dedicated AI policies or oversight committees; Chief AI Officer roles emerging; high-risk self-assessments under the EU AI Act under way
- Models mostly built in-house but typically hosted on external cloud; explainability tools used for monitoring
- Gaps: limited financial quantification of benefits, black-box transparency, inconsistent explainability definitions, data-management standards rarely applied to AI, cyber and third-party weaknesses
- ECB to keep monitoring under the 2026–28 priorities with focus on strategies, governance and risk management
What did Supervision Newsletter: AI use cases for credit scoring and fraud detection (Nov 2025) change for banks?
This is the first ECB publication with concrete supervisory findings on AI in core credit and fraud processes. It tells banks what 'good' currently looks like — no post-deployment self-learning, human sign-off on high-risk decisions, AI committees — and where JSTs will push: explainability definitions, data standards, and third-party/cyber controls around cloud-hosted models.
What did the ECB find about AI in credit scoring at euro-area banks?
From 2025 workshops with 13 banks: decision-tree models dominate, no bank allows self-learning post-deployment, human oversight covers high-risk decisions, and gaps remain in explainability definitions, data-management standards and benefit quantification.
How many ECB-supervised banks use AI?
The ECB's data collection covered 110 significant institutions in 2024; ECB speeches in 2026 put AI use at more than 85% of supervised banks.
| Date | Document | Status |
|---|---|---|
| Jul 7, 2026 | ECB 'Dear CEO' letter on AI-enabled cybersecurity threats (SSM-2026-0301) — Addressing AI-enabled cybersecurity threats — letter from the Chair of the Supervisory Board to CEOs of significant institutions | In force |
| Jun 3, 2026 | Elderson speech: 'Strengthening operational resilience for the age of AI' (June 2026) — Strengthening operational resilience for the age of AI — speech by Frank Elderson | Final |
| Feb 24, 2026 | 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 | Final |
| Feb 3, 2026 | Montagner speech: 'Encouraging innovation, managing risks' (Feb 2026) — Encouraging innovation, managing risks: the ECB's approach to digital transformation — speech by Patrick Montagner | Final |
| Nov 18, 2025 | SSM supervisory priorities 2026–28 — ECB Banking Supervision: SSM supervisory priorities for 2026–28 | In force |
| Oct 14, 2025 | Machado speech: 'Artificial intelligence and supervision: innovation with caution' (Oct 2025) — Artificial intelligence and supervision: innovation with caution — speech by Pedro Machado | Final |
Follow every document these regulators publish
6 curated AI stories for banking executives · Every morning · Free
Subscribe to BankingNewsAI →