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AI Safety Report: 97% of Treasury's AI Rules Can't Prevent Breaches

VectorCertain analysis reveals 97% of U.S. Treasury's AI risk framework is detect-and-respond, creating a $10M+ prevention gap in financial services AI governance.

This news reveals a systemic flaw in the primary regulatory framework designed to govern AI in the U.S. financial sector. The finding that 97% of the Treasury's AI risk controls are reactive, not preventive, means that even perfectly compliant banks and financial institutions remain vulnerable to AI-driven fraud, data breaches, and autonomous agent malfunctions that can execute in milliseconds. For consumers, this gap translates to direct risks: potential for unauthorized transactions, loss of personal financial data, and systemic instability that could affect account security and market confidence. For the industry, adhering to the current framework incurs exponentially higher costs—up to 100 times more—compared to investing in prevention, as demonstrated by the 1:10:100 economic rule. This isn't just a technical oversight; it's a multi-billion-dollar liability that leaves the financial system exposed to the very AI risks regulators sought to mitigate, demanding an urgent architectural shift in how AI governance is implemented.