OSFI Annual Risk Outlook semi-annual update (fiscal year 2026-2027)

The Office of the Superintendent of Financial Institutions (OSFI) of Canada said in its semi-annual update to the 2026-2027 Annual Risk Outlook that the pace of change in frontier AI capabilities is unprecedented and is amplifying the cyber, technology, third-party and reputational risks facing financial institutions. The report said frontier models can find and exploit more vulnerabilities, autonomously chain multiple vulnerabilities across interconnected systems to launch large-scale attacks, and shorten the time institutions have to detect and respond to threats; a small number of vendors dominate frontier models and the cloud infrastructure used to deploy them, and this concentration could create correlated disruption risk. OSFI said it has issued two technical risk bulletins this year, on Generative and Agentic AI and on Frontier AI, co-hosted industry events with the Canadian Centre for Cyber Security (CCCS), and proposed the AGILE framework in the FIFAI II report; it also co-authored with FSB members a paper on robust practices for the responsible adoption of AI, which was released for public comment in June.