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Email this9:35 am
June 22, 2023
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Royal Bank of Canada is blocking third-party personal artificial intelligence agents from directly accessing the bank’s digital properties, including online banking, joining a growing number of banks restricting agents’ access to customer data.
As security concerns over AI mount, regulators and banks have boosted scrutiny of AI agents from social media sites and other platforms. At a conference earlier on Tuesday, Canada’s top banking regulator said he is ramping up oversight of AI practices at the country’s largest lenders, but would stop short of barring them from allowing customers to use AI agents, semi-autonomous AI entities designed to carry out instructions from humans.
Customers can authorize AI agents, such as Meta Platforms Inc.’s Muse, to access their bank accounts, transaction history and credit card data to analyze spending patterns and make recommendations.
RBC conducted a security review of AI agent technology and its functionality, which informed its decision, the bank said Tuesday evening in an internal memo seen by The Globe and Mail.
“While we appreciate the benefits of using AI to save time, nothing is more important than the security of client information,” RBC head of technology and operations Naim Kazmi and head of personal banking Erica Nielsen said in the memo.
“While we recognize the potential of agentic AI to assist customers, we know that third-party personal AI agents accessing banking systems can create unacceptable customer risk, including acting beyond customer expectations or creating liability exposure.”
RBC did not elaborate in the memo on which tools fell into the category of “third-party personal” AI agents.
U.S.-based banks JPMorgan Chase & Co. and Charles Schwab Corp. recently said they are blocking or limiting outside AI agents’ access to their customers’ data. RBC is the first Canadian bank to block the use of external AI agents on its sites, but Bank of Montreal chief executive Darryl White said at an event last week that customers should not share sensitive banking data with AI agents.
Canada’s banks have been investing heavily in AI systems. RBC ranked third globally for AI adoption for the fifth consecutive year, according to a recent report by AI benchmarking platform Evident.
Lenders are betting on the technology to boost productivity and help generate more revenue. But the rapid adoption of the technology has also prompted concerns over cybersecurity, financial crime and privacy.
In an interview on Bloomberg TV last week, RBC CEO Dave McKay said the bank was considering blocking Muse from accessing the bank’s customer information.
RBC will begin work on blocking these platforms immediately, the lender said in the memo.
“We understand that this may be disappointing for the small portion of our clients who use these tools, and we make this decision with the safety and security of our clients and systems at the forefront,” RBC spokesperson Jeff Lanthier said in a statement.
Open this photo in gallery:
OSFI superintendent Peter Routledge, shown in Ottawa in 2023, said customers could choose to switch financial services providers based on whether they want to use AI agents.Dave Chan/The Globe and Mail
Peter Routledge, the superintendent of the Office of the Superintendent of Financial Institutions, said Tuesday he would ultimately leave the decision on AI agents up to individual banks, so long as they are following the regulator’s guidelines.
“I don’t think we would get down to the level of you should do it this way, and so everyone should do it this way. I don’t think that’s not our highest and best use,” Mr. Routledge told reporters during the Tech Festival Canada. “Where I stand right now on third-party risk and AI is we’re more principles-based.”
Mr. Routledge said customers could choose to switch financial services providers based on whether or not they want to use these types of services.
Earlier this month, Mr. Routledge said OSFI is planning to implement tighter guidelines on AI as threats from agents and Anthropic’s powerful Claude Mythos model accelerate risks among the country’s banks. In the spring, the regulator published guidelines for banks on agentic AI that ask whether the bank’s connection to a third party puts the institution or its customers at risk.
Global financial watchdog the Financial Stability Board has recommended that financial institutions reinforce oversight of their AI systems, including restricting agents’ access to sensitive information.
“To the extent a board of directors and their CEO decide now we’ve got to mitigate this risk from agents that are perhaps issuing transaction instructions on behalf of a human being – maybe that board and that CEO decides that’s too risky,” Mr. Routledge said.
“Provided it’s done in a responsible way, that to me is indicative of sound risk management.”
Mr. Routledge’s seven-year term as the head of OSFI will come to a close in June, 2028, unless he is reappointed. In the lead-up to that deadline, he said his most significant tasks will be to develop a framework for managing AI risks and changing OSFI’s culture to be more open to risk.
The next superintendent’s term, which will run from 2028 to 2035, will have to focus on major forces that will transform financial services, Mr. Routledge said. That includes the digitalization of money and the arrival of AI.
He said the financial system in 2035 will look vastly different than the one that exists today.
The next superintendent “is going to have to figure out how to supervise in that period of immense change and deliver both resilience – which Canadians want from their financial system – and Canadians want more competition,” Mr. Routledge said.
“They want more services for lower costs, and they want a financial system that’s fuelling growth at a time of tremendous economic transition for the country.”
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