Regulatory Bodies Enhance AI Oversight in Banking Sector

On July 16, 2026, South Africa's Prudential Authority (PA) announced stricter regulatory measures for banks and fintech firms focusing on AI, cloud computing, and cybersecurity. The PA's 2025/26 Annual Report indicates that technology risks are now integral to prudential supervision. New standards for cybersecurity and operational resilience were introduced, alongside a nationwide survey on AI adoption in the financial sector. The PA is particularly concerned about governance, data management, and the risks posed by third-party technology providers. Meanwhile, the Bangko Sentral ng Pilipinas (BSP) released AI governance principles, known as STARS, aimed at promoting responsible AI use among financial institutions. These principles emphasize sustainability, transparency, accountability, responsibility, and security. Although the BSP's guidelines are voluntary, they set minimum supervisory expectations for AI adoption across banks in the Philippines. Both regulatory bodies are responding to the rapid digital transformation in the financial sector, aiming to ensure stability and protect consumers.

Key Points: • South Africa's Prudential Authority is tightening oversight on AI and cybersecurity in banking. • The BSP in the Philippines issued voluntary AI governance principles for financial institutions. • Both regulators aim to enhance operational resilience amid rapid digital transformation.