Sam Woods, the outgoing chief of the UK Prudential Regulation Authority, said AI-related cyber security risk had risen to the top of the list of threats facing banks and financial firms, and he said he was very concerned about vulnerabilities in lenders' IT systems.
Woods made the comments in remarks reported by the Financial Times on 3 June. His term as Deputy Governor for Prudential Regulation and PRA chief executive ends in June 2026, and Katharine Braddick succeeds him on 1 July. In its 2026 priorities letter to UK deposit takers, the PRA said cyberattack and geopolitical risk remained the two most frequently cited sources of risk among financial institutions.
REGULATORY PRIORITIES
The Prudential Regulation Authority, which is part of the Bank of England, said in that letter that advanced technologies such as AI present novel risks and amplify existing issues, including reliance on a small number of third-party providers and cyber risks.
The PRA has asked firms to improve their operational resilience testing and to build capabilities not just to prevent breaches but to detect attacks quickly, respond effectively and recover critical services within their impact tolerances.
Sources: Financial Times; Bank of England/PRA (2026 priorities letter to UK deposit takers); GOV.UK