What happened
Canada's financial regulator, the Office of the Superintendent of Financial Institutions (OSFI), has released its 2026 semi-annual risk outlook, warning of increased risks to the country's financial system. The report cites geopolitical tensions, economic uncertainty, and rapid advances in artificial intelligence as key factors contributing to these risks.
The regulator notes that economic conditions in Canada have weakened, with volatile growth, high inflation, and financial pressures on businesses and households. The trade dispute between Canada and the United States has also had a negative impact, discouraging business investment and disrupting supply chains.
The report highlights the growing threats associated with advanced artificial intelligence systems, which have increased cybersecurity, technology, and reputational risks for financial institutions. These systems can identify and exploit vulnerabilities, allowing for faster and more sophisticated cyberattacks.
OSFI also warns of the financial sector's growing dependence on a small number of technology companies, which could expose multiple institutions to simultaneous disruptions in the event of a cyberattack or operational failure. The regulator is strengthening its ability to assess AI-related threats and working with financial institutions and international regulators to improve preparedness.