Cyber-Financial Contagion: Modeling the Propagation of an AI Vendor Compromise Through the Banking System
The banking system now depends on a small set of shared artificial intelligence vendors for fraud screening, credit decisioning, anti-money-laundering triage, customer analytics, and internal decision support. This paper studies how a compromise inside one of those vendors can propagate along a chain of operational, informational, and financial linkages until it triggers losses that look, from the outside, like a classical banking crisis. We build a four-layer heterogeneous network that couples AI vendors, financial institutions, interbank exposures, and customer accounts, and we propose CFC-Prop, a stochastic epidemic-and-clearing model that runs on that network. On a synthetic dataset w...
| Authors | Alex Leytes |
|---|---|
| Primary category | cs.AI |
| Published | 9 September 2026 |
| Last updated at source | 9 September 2026 |
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