AI adoption can increase organizational fragility by eroding human judgement and allowing technology to outpace governance, workforce development, and fallback arrangements, the Federal Reserve Bank of New York’s chief risk officer has warned.
Speaking at the recent Risk Live North America conference, Mihaela Nistor, Chief Risk Officer and Head of the Risk Group, said that automating employees’ tasks could remove the practical experience through which future leaders develop judgement. She warned that consequences could emerge five to seven years into the future as diminished expertise, institutional memory, and independent problem-solving. These weaknesses can escape existing risk frameworks because they develop without immediate failures.
Her remarks, expressing personal views, distinguished efficiency from resilience: an institution can perform routine work with fewer resources while weakening its overall capabilities.
Nistor called for deliberate investment in AI skills and professional development, alongside stress tests examining which human capabilities organizations must preserve.
She highlighted risks from AI dependencies across suppliers and mismatches between available skills and workforce needs. Autonomous agents, AI-enabled robotics, and potential concentration in computing, energy, and semiconductor infrastructure should also inform strategic stress scenarios, rather than being treated as predictable developments.
Nistor’s central message was that risk leaders must examine how successful automation could erode the human judgement on which resilience depends. “What happens to the institution when the technology succeeds?” she asked. “Not only when it fails.”
