FSCA and Prudential Authority Release Report on AI in Financial Sector

Posted 10 December 2025 Written by Acts Online
Category Technology

Brought to you by SA Accounting Academy: The Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) have published a joint report examining the adoption of Artificial Intelligence (AI) and its regulatory implications for South African financial institutions.

In terms of the joint oversight mandate of the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA), the authorities have released the inaugural report titled “Artificial Intelligence in the South African Financial Sector”. This report provides a comprehensive overview of the adoption of Machine Learning (ML) and Generative AI (GenAI) across various financial sub-sectors, identifying both operational opportunities and systemic risks.

The report highlights that adoption is most prevalent in the banking and payments sectors:

  • Banking institutions: 52% are actively employing AI technologies.
  • Payment providers: 50% have integrated AI into their service delivery.
  • Investment trends: While many smaller institutions plan investments under R1 million, more than 50% of surveyed banks anticipate investing over R20 million in AI during 2024.

Risk and Governance Frameworks

The authorities identified several critical risk areas that require robust governance frameworks and improved transparency. These include data privacy concerns, algorithmic bias and discrimination, reputational risks, and potential systemic vulnerabilities. The report emphasizes that as financial institutions scale their AI capabilities, they must ensure stronger consumer protection measures are in place to mitigate these risks.

Click here to download the Artificial Intelligence in the South African Financial Sector Report.

The associated Media Statement is also available for review here.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through the requirement to update technical competency in AI auditing and governance standards.
  • For your business: Financial services firms must implement formal AI governance frameworks and bias-detection protocols to align with FSCA and PA transparency expectations.
  • For your clients: Advise financial institution clients to perform impact assessments on GenAI deployments to mitigate data privacy, discrimination, and systemic risks.

Originally published at https://accountingacademy.co.za/news/read/fsca-report-on-artificial-intelligence-ai-in-south-africa-s-financial-sector

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