Regulatory Alerts2026-06-04
Added · Updated
Artificial Intelligence (AI) – Governance, Risk and Prudential Expectations
The Malta Financial Services Authority (MFSA) has issued a letter to its supervised licence holders, setting out prudential expectations for the governance and risk management of Artificial Intelligence (AI) adoption in the financial sector. The MFSA requires firms to recognize AI as a prudentially relevant risk, conduct structured internal assessments of their current and anticipated AI use, and ensure robust governance, risk management, and internal control frameworks are capable of supporting these developments sustainably. Firms must address identified gaps, ensure clear accountability, manage third-party dependencies, validate AI systems, maintain strong data governance, and utilize the provided self-assessment framework to align with supervisory expectations.