The Bank for International Settlements (BIS), an international financial institution comprising 63 central banks and monetary authorities, has expressed its confidence in the potential for widespread adoption of generative artificial intelligence (AI) in central banking. The BIS has surveyed 32 of its central bank members to assess their interest in adopting generative AI tools for cybersecurity, and the results are striking.

According to the report, over two-thirds (71%) of respondents are already using generative AI, and 26% have plans to incorporate such tools into their operations within the next one to two years. The BIS predicts that all of its members will adopt generative AI to enhance their internal cybersecurity measures. Central banks that have already implemented generative AI have praised its effectiveness in detecting cyber threats compared to traditional tools.

The adoption of generative AI in central banking is not without its benefits. The tools have accelerated banks' response times to cyberattacks and aided in the detection of suspicious trends and anomalies. However, the most common concern for central banks remains the costs associated with implementing generative AI tools.

The BIS report also highlighted the risks related to social engineering and zero-day attacks as well as unauthorized data disclosure as the highest concerns. Central banks unanimously believe that generative AI tools can eventually replace cybersecurity staff for conducting routine tasks. The BIS anticipates this move to "free up resources" that could be reallocated for other initiatives.

The BIS members include the central banks of prominent economies such as Australia, China, France, Belgium, Japan, South Korea, Italy, Switzerland, the United Kingdom, and India, among others. The BIS has recently teamed up with seven central banks to explore asset tokenization within the monetary system alongside private financial institutions. Dubbed "Project Agora," the initiative will build on a unified ledger concept proposed by BIS that bridges tokenized commercial bank deposits and tokenized wholesale central bank money.

The BIS's enthusiasm for generative AI in central banking is not surprising, given the potential benefits it offers. As the world becomes increasingly digital, the need for robust cybersecurity measures has never been more pressing. Generative AI tools have the potential to revolutionize the way central banks approach cybersecurity, and the BIS's prediction that all of its members will adopt such tools is a testament to their confidence in the technology.