Germany’s financial watchdog Bafin said it is starting oversight of artificial intelligence at banks and insurers after lawmakers widened its authority.
The broader mandate follows legislation that took effect on Wednesday.
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Under the new rules, Bafin can impose fines as part of efforts to safeguard fundamental rights.
The regulator will check whether companies meet transparency requirements when using chatbots with customers and when deploying AI systems in sensitive areas such as credit assessments.
It will watch for banned practices, including the gathering and evaluation of sensitive personal data in ways that could leave people at an unfair disadvantage.
Bafin president Mark Branson was quoted by Reuters as saying: “People have to be able to trust that their fundamental rights will be protected when AI is used. Bafin will ensure, for example, that everyone has fair access to financial services and that no one is discriminated against as a result of AI.”
In an interview published on its website, Bafin expert Jens Obermöller said the regulator’s focus would be on AI used in activities that require authorisation, including banking and insurance business.
“For example, we will review a sample of the AI applications that are used by many financial entities in particularly relevant areas. But what we do not do is monitor every single AI system in every financial entity. What the AI Act mandates is not supervision; it is monitoring,” he said.
Obermöller said Bafin would also turn to high-risk AI from December 2027.
In banking and other financial institutions, he said “high-risk AI” usually means systems used to assess the creditworthiness and credit scores of natural persons.
He added that the AI Act provides a general framework and leaves room for innovation, with regulatory sandboxes and testing in real-world conditions planned.
