Reported by Zor Gorelov

(Summary shared below. To read full report, go to: https://www.americanbanker.com/opinion/ai-agents-are-going-to-test-the-limits-of-bank-compliance?utm_source=linkedin&utm_medium=social&utm_campaign=bank-think)

Banks are confronting a new kind of “customer” that isn’t human: autonomous AI agents that check balances, move money, and make financial decisions on behalf of users. As agentic AI becomes embedded in consumer finance, traditional control frameworks built around human behavior are showing their limits. The article argues that the industry is entering a structural shift where AI agents will routinely access core banking systems, creating profound legal, operational, and regulatory implications.

Know Your Customer remains foundational, but it is no longer sufficient on its own. When banks grant transaction authority to opaque, self-directed AI systems, they inherit new risks tied to accountability, liability, and compliance. Without a way to identify and govern these agents, banks risk regulatory exposure under consumer protection laws, AML and sanctions regimes, and data privacy frameworks—especially when responsibility for errors or misconduct is unclear between customers, banks, and AI providers.

Agentic AI also disrupts fraud and monitoring systems designed to flag unusual human behavior. Continuous automated actions—such as frequent balance transfers, credit optimization, or account openings—can trigger false positives or mask genuine abuse. These behaviors blur the line between customer intent and machine-driven action, challenging long-standing assumptions embedded in fraud detection, AML controls, and credit risk models.

To address this gap, the author proposes extending KYC principles into a new “know your agent” framework. This approach would require banks to authenticate AI agents, define and limit their permissions, ensure their actions are transparent and auditable, and confirm that their behavior aligns with regulatory and fiduciary standards. The goal is not to block innovation, but to make agent-driven finance governable.

A mature know-your-agent program would rest on three pillars: identifying and validating the AI system and its ownership, conducting due diligence on its behavior and governance, and continuously monitoring its actions in production. As consumers increasingly delegate financial control to machines, the article concludes that embedding these safeguards will be essential to preserving trust, compliance, and stability in an AI-driven banking ecosystem.