FSB finalises 12 sound practices for responsible AI adoption
For the chief risk officer at a regional bank
The Financial Stability Board (FSB) published its final report on Sound Practices for Responsible Adoption of Artificial Intelligence on Oct. 15, setting out 12 sound practices for financial institutions.1
The FSB said the practices aim to help institutions harness the benefits of AI while managing its risks in ways that support the resilience of the financial system.1 The final report reflects public feedback on a consultative version published in June 2026, and the FSB published an overview of the consultation responses the same day.1
Four practices cover organisation-wide governance: board and senior management oversight of how AI adoption fits the business model, risk appetite and strategy; a governance framework with well-defined roles and responsibilities; AI risks in the risk management framework with effective documentation of AI use; and continuous learning and adaptation.1
Eight practices cover the AI lifecycle: assessment of the materiality and risks of AI use cases at inception and thereafter; selection of AI technologies; data governance; explainability and compensating controls; performance evaluation; human oversight; AI-related cyber and ICT risks; and risks from third-party AI dependencies.1
The FSB described the practices as a toolkit that institutions can tailor to their context and risk profile and integrate into existing frameworks, including those for cyber and third-party risk.1
The FSB said in its press release that it strongly encourages the board and senior management of financial institutions to reference the sound practices when developing and refining their AI governance, risk management and control frameworks.1
The practices are voluntary, but the FSB brings together national authorities from 24 countries and jurisdictions, so supervisors may use them as a reference point. Banks that cannot show an inventory of AI use cases assessed for materiality and risk (practice v) may find it hard to demonstrate the rest, since tailoring depends on knowing what AI is in use.
The FSB said in its press release that it will monitor developments as AI technologies and applications evolve and update the sound practices as necessary.1
Our take. The FSB calls these practices a toolkit to tailor, not a rule. Examiners tend to read a list a board is told to reference as the list the board will be asked about. Map to all 12 now.
Action. Model risk: Build an inventory of AI use cases, rate each for materiality, and map its documentation to the FSB's 12 practices.
What our records say
The consultation report proposes 12 sound practices; it is not binding on banks directly.1 Its status is Proposed.1 On 10 June 2026 the FSB published a consultation proposing 12 sound practices for responsible AI adoption by financial institutions, with comments due 22 July 2026.1
From our records
- FSBregulator · binding Non-binding standards · latest FSB Chair's letter to G20 (Aug 2026) (Aug 2026), Responses to FSB AI sound practices consultation (Aug 2026) (Aug 2026)
- FSB AI sound practices consultation (June 2026)document · proposed FSB, issued Jun 2026 · comments due 2026-07-22, Official text