Federal Reserve Bank of San Francisco

SF Fed Pres. Mary C. Daly on How the Fed Is Strategically Adopting AI

In a recent briefing, Federal Reserve President Mary C. Daly outlined the central bank’s strategic push to embed artificial intelligence across its operations. She emphasized that modern AI tools are essential for maintaining efficiency, effectiveness, and resilience while safeguarding the institution’s core mission of financial stability. Daly described a phased rollout that starts with sandbox environments, allowing staff to experiment safely before moving to production. The approach stresses ROI‑focused procurement, ensuring AI solutions add measurable value rather than merely increasing costs. Vendors now offer turn‑key AI features—such as in accounting or tax software—but the Fed insists on a human‑in‑the‑loop model to preserve oversight and risk controls. “We've got to make sure that we're doing our work well and no risk… we need to be efficient, effective, and resilient,” Daly said, underscoring the balance between automation and accountability. She highlighted that IT and coding teams are leveraging AI to accelerate the development of electronic payment systems, yet human judgment remains the final safeguard. The Fed’s methodical adoption signals to other regulators and financial institutions that AI can enhance operational speed and accuracy, but only when paired with rigorous training, clear ROI metrics, and continuous human supervision. This blueprint may shape industry standards for responsible AI integration in critical financial infrastructure.