On July 14, the Commissioner of the CFTC, Kristin Johnson, spoke at an international regulators roundtable to discuss AI in the financial services sector and emerging cyber risks. The Commissioner’s speech highlighted AI’s potential to make financial services more inclusive, efficient, and accessible, while emphasizing the need for strong governance systems and regulatory collaboration. Johnson delineated how AI systems could be used to detect unusual transaction patterns in real time and use behavioral biometrics to authenticate users to reduce fraud. AI may also support continuous compliance monitoring, leading to faster resolution and fewer regulatory breaches.
The roundtable called for fintechs to invest in model risk management and responsible data practices. Supervisory approaches must evolve to keep pace with market changes, and regulatory agencies supervise using AI, known as “suptech,” to review large data volumes and detect risks automatically. This technology would offer regulators tools to combat fraud, market manipulation, illicit finance and money laundering, while reinforcing the importance of adapting oversight to the evolving financial landscape.
On cybersecurity, the CFTC stressed the significance of crisis response and recovery planning such as implementing incident response protocols and joint cyber exercises. The CFTC urged investment in cyber capacity building, particularly in emerging markets, and reiterated that cyber resilience is a must-have to maintain financial stability across multiple jurisdictions. The CFTC also highlighted other areas where further work is needed such as harmonizing regulatory expectations, information sharing, concentration risk, and supply chain vulnerabilities.
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