The Reserve Bank's latest Financial Stability Report warns that widespread AI adoption could hit borrowers' ability to repay loans and heighten cyber risks — and names Anthropic's Mythos model as a specific concern.
The Reserve Bank has flagged that the growing adoption of artificial intelligence across the financial sector could amplify risks to New Zealand's financial stability — both on the credit side, through potential job losses affecting mortgage repayments, and operationally, through increased cyber threats. The observations appear in the RBNZ's latest Financial Stability Report, released this week.
AI and credit risk
The RBNZ's core concern on the credit side is straightforward: if AI adoption leads to significant job displacement in certain sectors, more borrowers could find themselves struggling to service their mortgages. The Bank notes this as a plausible second-order effect of AI on household financial stability.
This is not a current crisis — the report does not point to any AI-driven unemployment already affecting mortgage performance in New Zealand. Rather, it is a forward-looking risk that the RBNZ says it is monitoring as AI capabilities and business adoption accelerate.
The Mythos model and cyber risk
On the operational side, the report names a specific model: Anthropic's Mythos. The RBNZ says it is "actively monitoring the risks" that Anthropic's Mythos model may pose to the New Zealand financial sector.
The concern with Mythos is its stated capability in cybersecurity and hacking tasks. Frontier AI models with advanced capabilities in these areas raise the bar for malicious actors — lowering the cost and increasing the sophistication of cyberattacks against financial institutions.
The report notes that geopolitical tensions could increase the risk of cyberattacks and technology outages more broadly. No material cyber impacts from the Middle East conflict have been observed in New Zealand's financial sector to date, but the sector's reliance on cloud service providers has been highlighted as a vulnerability — particularly after infrastructure supporting these services was targeted.
A cyber incident at the RBNZ's own system
The report also discloses that the Exchange Settlement Account System — the RBNZ's own real-time gross settlement system that sits at the centre of New Zealand's payment infrastructure — experienced a cyber incident between April and September last year. The outage disrupted services for all participants, including one in Australia, and affected roughly $4.5 billion of transactions, representing about 15 percent of the average daily balance.
The disruption was resolved within three hours, and all delayed transactions were processed immediately. The RBNZ says it completed a comprehensive incident management report and shared it with all ESAS account holders. The episode illustrates the interconnectedness of financial market infrastructure — disruption at one node flows through to others.
What this means for the system's health
The Financial Stability Report's overall tone is cautious but not alarmist. The RBNZ acknowledges structural risks that are evolving — particularly AI-related credit and operational risks — while noting that the financial system has so far remained resilient. The publication of concerns about Mythos and the ESAS incident reflects a broader trend among regulators toward greater transparency about emerging risks, rather than waiting for incidents to occur before surfacing them.
For borrowers and households, the AI credit risk framing is a reason to stay attentive: those in sectors most exposed to AI-driven disruption may want to ensure their mortgage buffers are adequate and their employment situation is monitored. For financial institutions, the RBNZ's Cyber Resilience Guidance sets expectations for how they should be preparing for a more contested cyber environment.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.