Scotti urges action on AI governance in financial markets
Chiara Scotti, Deputy Governor of Banca d'Italia, highlighted the need for stronger governance and resilience frameworks for artificial intelligence in Italian financial markets. Her remarks were based on a joint OECD-EC-Banca d'Italia report.
AI's growing footprint in Italian finance
Artificial intelligence is no longer just a future prospect for finance.
Its use is becoming increasingly significant across the Italian financial sector, gradually extending into financial market activities.
Much of this use remains concentrated in ancillary functions, internal processes, and decision-support tools, but it is beginning to influence how core market functions operate.
This matters because financial markets and infrastructures are systems where innovation, efficiency, and trust must evolve together.
Changes in how information is processed or decisions are made can directly affect price formation, liquidity provision, and market integrity.
The primary challenge is not technological, but rather how AI can be embedded in governance, accountability, data quality, operational resilience, and the management of third-party dependencies in ways that strengthen, rather than weaken, market functioning.
This also calls for public authorities and market participants to adapt their capabilities to a changing environment.
Foundations and effective governance
Two critical areas for action are highlighted.
First, strengthening shared foundations requires reducing data gaps and clarifying regulatory interactions, especially between the AI Act and financial sector legislation.
The European Financial Data Space is key to fostering safe, scalable innovation and an integrated EU market.
Second, effective AI governance and resilience are paramount.
Boards and senior management must embed AI-related risks into control frameworks.
Operational resilience testing must integrate AI scenarios, leveraging DORA and TIBER-EU.
This ensures responsibility for AI aligns with authority, strengthening market functioning against evolving vulnerabilities and promoting trust.
Trust as finance's valuable asset
The transition from AI experimentation to sustainable integration requires clear pathways from pilot to production and sustained investment in tools and competences.
Effective governance is not a constraint but a condition for sustainable and trustworthy innovation in finance, ensuring safety and innovation evolve together.
Public authorities must support this process through guidance, oversight, and creating conditions for safe adoption, recognizing trust as a particularly valuable asset.