The European Central Bank has stepped up its scrutiny of how exposed euro-area lenders are to the fast-growing artificial intelligence industry, reflecting concerns that banks may be building credit risk in hard-to-track ways and that AI could reshape parts of the financial sector, Bloomberg reported.

The Frankfurt-based supervisor has asked a small number of banks to provide more granular information on lending linked to AI-related activity, including financing tied to data centers, the news agency said. In parallel, the ECB is holding targeted workshops designed to assess how banks are using generative AI, with sessions covering areas such as business models, governance, and risk management. 

At least one institution interpreted the ECB’s focus as a signal to exercise caution around lending to segments such as data centers, which sit at the core of the AI build-out and are closely tied to energy supply and infrastructure needs, Bloomberg said, citing a source that spoke on the condition of anonymity. 

The ECB and other authorities have recently widened their efforts to probe banks’ operational dependence on major technology providers. That includes asking what contingency plans banks have if a cloud service provider or data center became unavailable on short notice, with data recovery and back-up arrangements highlighted as key vulnerabilities, according to the report. 

Read more at Bloomberg