The Office of the Superintendent of Financial Institutions (OSFI) has endorsed the Financial Stability Board’s (FSB) 12 sound practices for responsible artificial intelligence (AI) adoption, which aim to help financial institutions manage AI-related risks while benefiting from the technology.
In a statement, OSFI welcomed the FSB’s final report, Sound Practices for Responsible Adoption of Artificial Intelligence, which outlines a proportionate approach to AI governance and risk management throughout the technology’s lifecycle.
The FSB published the final report following a public consultation on its proposed practices in June 2026. The report groups the 12 practices into two groups that address organization-wide governance and risks associated with AI development and deployment.
The first group emphasizes the role of boards and senior management in aligning AI adoption with financial institutions’ business models, risk appetites and strategies. It also addresses governance frameworks, clearly defined responsibilities, documentation of AI use, integration of AI risks into existing risk management frameworks, and continuous learning.
The second group focuses on managing risks throughout the AI lifecycle. Its practices cover assessments of AI use cases, technology selection, data governance, explainability, performance evaluation, human oversight, cyber and information and communication technology risks, and third-party AI dependencies.
The FSB said financial institutions can tailor the practices to their circumstances and risk profiles and incorporate them into existing risk management frameworks. The report also includes case studies illustrating how institutions have applied certain practices proportionately.
OSFI acknowledged that AI can improve operational efficiency, strengthen risk management and enhance customer service. However, the regulator noted that AI can amplify existing risks or introduce new operational, technology, cyber, third-party, model, data and governance risks.
OSFI also identified the risk that financial institutions could fall behind if they do not adopt AI sufficiently quickly.
The regulator said the FSB practices complement its existing principles-based guidelines, including those addressing corporate governance, integrity and security, third-party risk, technology and cyber risk, operational resilience, and model risk management.
Since 2022, OSFI has worked with the Global Risk Institute through the Financial Industry Forum on Artificial Intelligence to deepen its understanding of AI-related opportunities and risks. It also issues Technology Risk Bulletins addressing emerging technology risks and sound risk management practices.
OSFI said it will continue monitoring AI’s effects on financial institutions and the risk environment. The FSB also plans to monitor developments and update its sound practices as necessary.