AI Risk Management

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6 papers in the last four weeks, up 100% on the four weeks before. 0.1% of all new papers.

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Latest papers 72

Jun 24, 2026cs.CR

Taxonomy of Risks on Automated Fact-Checking Systems Considering its Propagation

In recent years, the posting of fake news including disinformation and misinformation on social networking services (SNS) has become a social problem. To combat this fake news, fact-checking that is the process of assessing the veracity of posts on SNS has become increasingly important. While fact-checking is currently performed by fact-checking organizations, it is difficult to fact-check all posts on SNS. Therefore, the use of automated fact-checking systems is effective. Recent automated fact-checking systems utilize artificial intelligence and large language models, so there are risks of incorrect judgments and posting incorrect results on social media which can lead to the spread of misinformation or to engage in defamation. In this paper, as a first step toward enabling the safe use of automated fact-checking systems, we categorize the specific risks on automated fact-checking systems. In this categorizing, we consider a three-stage risk propagation: risk factors, hazardous situations, and harm. Our analysis revealed that 32 specific risks exist in automated fact-checking systems. In this paper, we utilize the categorized risks as analytical cues (guide words) to present the risk assessment of the automated fact-checking system DEFAME. This assessment result indicates that risks that cannot be derived using STRIDE, a conventional IT security risk assessment method can be derived using our guide words.

Jun Yajima, Tatsuya Oka, Takao Okubo

1Fujitsu Limited · Institute of Information Security

AI Risk Management Automated Fact-Checking

Jun 20, 2026cs.AI

AgentRiskBOM: A Risk-Scoping Security Bill of Materials for Agentic AI Systems

Agentic AI systems retrieve private context, invoke tools, write files, call external services, coordinate with other agents, and may act without human approval. Existing bill of materials artifacts improve transparency for dependencies, model metadata, and training provenance, but leave an agentic transparency gap: capability opacity, the absence of a structured account of what a deployed agent can access, remember, change, delegate, and prove afterward. This paper introduces AgentRiskBOM, a security BOM for risk-scoping tool-using AI agents. It is an additive layer over SBOM, AIBOM, and MLBOM artifacts, referencing them where authoritative while adding fields for runtime authority: autonomy, tool permissions, memory, credential scope, approval gates, audit signals, inter-agent communication, and external action capability. We implement AgentRiskBOM as a JSON-schema artifact with a reproducible corpus, risk scenarios, scorer, diff detector, control mapper, and reports. We evaluate AgentRiskBOM on 13 open-source agents spanning coding, RAG, and multi-agent archetypes, plus 52 risk scenarios across 14 categories. The schema validates all 13 corpus artifacts. Coverage analysis gives AgentRiskBOM a native-equivalent score of 14 across 16 capability dimensions, vs. 1 for SBOM, 1.5 for AIBOM and 2 for MLBOM. Across modeled risk categories, AgentRiskBOM exposes 100% risk-category visibility vs. 10.5% for SBOM-like and 20.9% for AIBOM-like views. To test agentic authority drift, we inject 33 structured deployment mutations; the diff detector identifies the correct change type for all mutations. A secondary penalty-based scorer yields a Spearman correlation of 0.73 with the primary scorer, supporting rank-level consistency while showing that thresholds require human calibration. The results show that agentic AI security needs a machine-readable authority-and-risk artifact before incidents occur.

Srimonti Dutta, Akshata Kishore Moharir

WAI USA Research Labs · WAI USA · Austin, USA +1

AI Risk Management AI Agent Auditing AI Agent Security

Jun 19, 2026cs.AI

The AI Evaluability Gap: The Missing Layer for Managing Risk and Sustaining Value

Organizations deploying AI face two fundamental governance challenges: managing AI risk and sustaining AI value. Both depend on evidence whose sufficiency cannot be taken for granted. We call the shared underlying challenge the AI Evaluability Gap: the condition in which organizations lack sufficient evidence to support high-confidence governance decisions regarding either risk or value. We argue that this gap reflects a category error in current practice. Existing governance approaches focus primarily on properties of systems, such as safety, fairness, reliability, compliance, and value, while paying comparatively little attention to the evidentiary foundations required to justify decisions about those properties. We further argue that AI governance encompasses both operational decisions regarding whether a system may operate and investment decisions regarding whether it merits continued organizational resources. To address this problem, we introduce Evaluability, defined as the capability of a system to generate, maintain, and renew evidence sufficient to support high-confidence governance decisions over time. We formalize governance decisions as functions of calibrated confidence Conf(D|E) and identify six properties of evaluable evidence: observability, attributability, intervenability, verifiability, calibration, and temporal validity. The framework distinguishes Operational Certification, which relies primarily on structural evidence to justify deployment decisions, from Investment Certification, which relies primarily on causal evidence to justify continued resource allocation. We argue that evidence sufficiency is a missing layer of AI governance and that closing the AI Evaluability Gap is a prerequisite for both managing risk and sustaining value in AI-enabled organizations.

Vishal Srivastava, Tanmay Sah

Whiting School of Engineering Johns Hopkins University Baltimore, MD 21218 · Harrisburg University of Science and Technology Harrisburg, PA

AI Assurance AI Risk Management AI Governance

Jun 15, 2026cs.AI

When Agent Automation Becomes Profitable: Quantifying and Insuring Autonomous AI Risk through Trace-Economic Underwriting

AI agents can now take irreversible actions in operational systems, but agent-caused losses are still not clearly assigned, priced, or transferred. Providers often disclaim consequential damages, users are left with uncompensated losses, and default human review limits the efficiency gains of automation. We ask when autonomous AI deployment can become economically acceptable despite failure risk. Our answer is to quantify risk at the customer-task-trace episode level and transfer it through insurance. Automation is acceptable when its expected benefit exceeds the premium, control cost, and remaining risk. This requires a defined role with bounded permissions and comparable traces. We introduce trace-economic underwriting, which maps tool-use traces to customer exposure and claimable loss, then uses this representation for pricing, control, and risk transfer. It uses deterministic economic labels rather than an LLM judge. In our trace-to-loss testbed, trace-economic pricing reduces pricing MAE from

17.7K to

569 and removes regressive cross-subsidy. A 300-trace expert audit accepts 295 labels unchanged. On 1,000 real SWE-smith traces, trace-conditioned controls reduce CVaR95 by 72%. Theorem~1 gives a finite-sample scope condition. We release code, labels, and audit sheets.

Binyan Xu, Xilin Dai, Fan Yang +1

The Chinese University of Hong Kong, Hong Kong, Hong Kong · Zhejiang University, Hangzhou, China

AI Risk Management AI Agent Safety

Jun 15, 2026cs.GT

Gaming-Resistant Insurance Contracts for Autonomous AI Agents: Strategy-Proof Toll Mechanism Design

Paper A defines a time-consistent actuarial runtime that prices each side-effect-bearing action against a contractually fixed safe default and gates execution against a reserve budget. It treats the operator as passive. This paper makes the operator strategic. We characterise a five-attack space for autonomous AI-agent insurance contracts and prove when the actuarial runtime is gaming-resistant. Two attack surfaces -- post-toll safe-default selection and within-boundary action splitting -- are closed by Paper A's minimal-authority and no-splitting clauses. The remaining three require new contract clauses. First, common-control aggregation prevents cross-boundary re-routing from reducing toll below the boundary potential applied to total exposure. Second, interface failures such as invalid JSON are contract-relevant events, not safety wins: treating them as zero-toll safe defaults can reward unreliable models, while escalation fees reverse the incentive. We validate this interface-compliance theorem on committed cross-model traces from the companion empirical paper. Third, a model-identity menu with a componentwise-minimum penalty schedule makes truthful reporting of the deployed model weakly dominant. We then compose these clauses with Paper A's runtime guarantees to obtain joint incentive compatibility over the five-attack space. Finally, a two-parameter premium family discharges operator individual rationality and weak budget balance at the truthful equilibrium. The result is an incentive-compatibility layer for actuarial control of autonomous-agent side effects.

Hao-Hsuan Chen

Mechanism Design AI Risk Management AI Agent Safety AI Agent Governance

Jun 13, 2026cs.CY

The Perils of Agency: How Developers Perceive, Prioritize, and Address Risks in Agentic AI Products

Agentic AI systems act autonomously, use tools, adapt to context, and operate in complex real-world environments. However, these same characteristics can create or exacerbate product risks. We studied how industry developers (n=35) perceive, prioritize, and address the risks in their agentic AI products. We found that developers' perceptions of risk were closely tied to the qualities that made the product agentic, such as autonomy, tool use, and usage in a real-world context. Developers prioritized product and business risks before considering downstream societal risks like job displacement and end-user privacy. This prioritization also impacted developers' ability and motivation to mitigate agentic risks. Finally, developers lacked mature controls for containing agentic risks, often relying on constraining the same characteristics that make agents useful: e.g., autonomy and goal complexity. These findings reveal a capability vs. risk control tension in agentic AI development: developers need to address risks that emerge from agentic capabilities, yet they currently have limited support for doing so without constraining agentic functionality.

Hao-Ping Lee, Jessica He, David Piorkowski +3

Carnegie Mellon University · IBM Research · Alinia

AI Risk Management AI Agent Safety Agentic AI

Jun 13, 2026cs.AI

Cognitive Debt: AI as Intellectual Leverage and the Dynamics of Systemic Fragility

We develop a formal theory of cognitive debt: the stock of unverified reasoning obligations that accumulates when individuals use AI as a substitute rather than a complement for first-principles cognition. The model features two state variables per agent, cognitive capital and cognitive debt, and a multiplicative production technology in which cognitive capital functions as collateral that determines the return to AI adoption. We establish six propositions. Rational agents incur positive cognitive debt because the costs are deferred, partially external, and masked by short-run productivity gains. Tranquil periods lower subjective risk assessments, raise AI substitution intensity, and compound leverage, generating a cognitive Minsky moment in which subjective risk falls while true systemic fragility rises. Expected crisis losses are convex in aggregate leverage. Post-crisis, output-target pressure can produce a false-correction loop in which agents patch AI failures with more AI. The decentralised equilibrium over-adopts substitutive AI relative to the social optimum because of systemic risk, cognitive public goods, and arms-race externalities. In a two-type heterogeneous-agent economy, high-cognitive-capital agents adopt AI more intensively and may eventually erode their unaided cognitive capital below that of initially lower-skilled agents.

Shuchen Meng

New York University

AI Risk Management Cognitive Offloading

Jun 9, 2026cs.LG

Privacy-Preserving Credit Risk Prediction with Alternative Data

Credit risk prediction is a critical problem in the consumer credit industry. Traditionally, financial institutions construct credit risk prediction models using borrowers' demographic, financial, and credit history data, collectively referred to as traditional data. Recent studies have demonstrated that alternative data, such as borrowers' mobile phone communication data, enable lenders to acquire fuller and more accurate profiles of borrowers' creditworthiness, thereby improving credit risk prediction performance. Nevertheless, alternative data are held by external entities independent of financial institutions. Directly sharing alternative data with financial institutions infringe on consumer privacy, yet existing credit risk prediction studies largely overlook this issue. To address this gap, we define a new problem, namely privacy-preserving credit risk prediction with alternative data, which simultaneously considers three practical constraints: the privacy-preserving constraint that protects consumer privacy, the model-confidentiality constraint that learns and stores the model centrally at the financial institution, and the lossless constraint that maintains the performance of the learned model. To solve this problem, we develop PrivacyCredit, a novel privacy-preserving machine learning method. We then theoretically demonstrate the privacy-preserving, model-confidential, and lossless properties of PrivacyCredit. Through extensive experiments using a real-world credit dataset linked with alternative data, we demonstrate the predictive value of securely incorporating alternative data into credit risk prediction and show that PrivacyCredit achieves the same predictive performance as the model learned from the insecure plaintext combination of traditional and alternative data. We further evaluate its model-confidentiality property and computational efficiency.

Hongzhe Zhang, Jiarong Xu, Jing He +1

School of Management and Economics, The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen), China · School of Management, Fudan University, Shanghai, China · Lerner College of Business and Economics, University of Delaware, Newark, Delaware

AI Risk Management Privacy-Preserving ML Credit Scoring

Jun 7, 2026cs.LG

RiskNet: A large-scale dataset of AI risk incidents from news with alignment and multi-dimensional annotations

As artificial intelligence (AI) systems are increasingly deployed across socially consequential domains, reports of AI-related harms and failures have grown in frequency and diversity. Although existing governance frameworks articulate high-level principles for responsible AI, large-scale empirical resources for tracking and analyzing real-world AI risk incidents remain limited. Existing incident collections are often manually curated, relatively small in scale, and insufficient for continuous, data-driven monitoring and downstream computational analysis. To address this need, we present RiskNet, a large-scale dataset of AI risk incidents constructed from large-scale multilingual news sources. RiskNet applies a structured pipeline for AI risk news identification, event-level report screening, incident alignment, and multi-dimensional incident classification. The resulting resource organizes dispersed news reports into incident-centered records and provides benchmark datasets for event classification, incident alignment, and incident-level risk labeling. In its current release, RiskNet covers hundreds of millions of source records and yields a large-scale collection of AI risk-related reports, including aligned incident clusters and annotated benchmark subsets. The dataset is also accessible through an online platform for browsing and exploration. We describe the data sources, processing workflow, taxonomy design, and technical validation of the resource. RiskNet is intended to support downstream research on AI safety, governance, risk analysis, and benchmarking, as well as longitudinal and cross-source analyses of AI-related harms. By providing a structured and reusable empirical resource, RiskNet helps bridge the gap between high-level governance principles and the documented realities of AI risk incidents.

Leihan Zhang, Wecheng Ye, Xianlong Ma +5

School of Economics and Management, Beijing University of Posts and Telecommunications, 10 Xitucheng Road, Haidian District, Beijing,2026 100876, China. · Beijing Key Laboratory of Multimodal Data Intelligent Perception and Governance, 10 Xitucheng Road, Haidian District, Beijing, 100876, Jun China.

AI Risk Management AI Governance

Jun 6, 2026cs.LG

TRUST-SCF: Transformer-based Risk Understanding and Scoring for Transactional Supply Chain Finance

Supply Chain Finance (SCF) and LendTech platforms need credit scoring systems that respond to evolving transaction behavior, repayment delays, and active exposure. We propose TRUST-SCF, a transformer-based framework for transaction-level risk prediction and dynamic credit scoring. Each user history is represented as a sequence of transaction tokens containing utilization, repayment delay and transaction position. The main contributions are: (1) a financially aligned attention bias that combines utilization similarity and recency, enabling the model to compare repayment behavior under comparable exposure conditions; (2) continuous repayment-delay prediction in a log-transformed target space, reducing the influence of extreme delays while improving sensitivity to short-delay behavior and (3) a label-efficient credit-scoring pipeline in which the final credit score is not trained using any explicit external credit-score label, but is instead derived from predicted delay, potential risk over simulated utilization, actual unpaid exposure, and nonlinear calibration. Experiments on real transaction data from more than 300,000 transactions show that TRUST-SCF improves delay prediction over sequential baselines and produces scores that are strongly associated with future repayment behavior. These results suggest that TRUST-SCF is a practical framework for adaptive credit scoring and transaction-level risk mitigation in SCF and LendTech environments.

Mohammadamin Davoodabadi, Amirabbas Shakeri

Department of Growth Barook Co.

Financial Services AI Risk Management Credit Scoring

Jun 5, 2026cs.ET

The Three-Ring Architecture: Governing Agents in the Era of On-Platform Organisations

The current phase of enterprise AI deployment faces a structural failure: organisations are acquiring agentic capability without the infrastructure to govern it. The result is expected to reproduce the error of the first wave of AI deployment: decentralised intelligence without a federation layer leading to a 95% project failure rate. This paper formalises the Three-Ring Architecture as the governing infrastructure of the on-platform organisation. Ring 1 is the existing production architecture; Ring 2 is the M2 federation layer built on strategies-based agentic AI; Ring 3 is the LLM-based frontier intelligence layer. Ring 2 constitutes, in the technically exact sense, the operating system of the agentic enterprise - performing at the organisational level what a computing OS performs at the device level: resource abstraction, process coordination, permission enforcement, and a stable platform for compounding intelligence. A central contribution is the formal distinction between Ring 2 and Ring 3 risk profiles. Strategies-based agents operate within a deterministic framework: their consequences are traceable, their permissions enforceable, their deviations recoverable. LLM-based agents introduce a categorically distinct risk: a non-deterministic actor whose deviations propagate through complex organisational systems without retrospective traceability. Ring 2 is not a useful addition - it is a necessary condition of control and compliance. A further consequence: every improvement in LLM capability is a structural tailwind for this architecture. More capable non-deterministic actors produce larger consequences when they deviate. The governance requirement scales with capability. The architecture has been validated across a decade of deployment in financial services, government, procurement, and compliance among other sectors.

Sergio Alvarez-Telena, Marta Diez-Fernandez

University College London, UK · SciTheWorld, Spain

AI Risk Management LLM Agent Orchestration AI Agent Governance AI Governance

Jun 3, 2026cs.AI

Insurance of Agentic AI

Agentic artificial intelligence (AI) systems are transforming the risk landscape by extending beyond information generation to autonomous planning, tool invocation, decision execution, and persistent modification of digital and physical environments. These capabilities introduce novel exposures that do not fit neatly within traditional insurance categories such as cyber, professional liability, product liability, or directors and officers coverage. This paper examines the emerging insurance market for agentic AI and develops a framework for understanding its underwriting, pricing, reinsurance, and product-design implications. We characterize agentic AI as a continuum of autonomy and delegated authority, emphasizing the distinction between informational outputs and systems capable of independently generating insured events through external actions. We analyze major risk pathways, including hallucinations, prompt-injection attacks, autonomous decision errors, model drift, dependency failures, and cyber-physical harms, and evaluate how existing insurance products are adapting to address these exposures. The paper further proposes an actuarial framework based on exposure assessment, scenario analysis, dependency mapping, and accumulation-risk management, drawing parallels to the evolution of cyber insurance. Finally, we present a coordinated insurance architecture that integrates cyber, technology errors and omissions, product liability, performance-warranty, and affirmative AI-liability coverages through explicit allocation mechanisms and dedicated AI aggregates. The analysis suggests that the future of agentic-AI insurance lies not in a single monoline product but in a layered ecosystem of complementary coverages supported by improved governance, transparency, telemetry, and regulatory clarity.

Quanyan Zhu

Department of Electrical and Computer Engineering, New York University, Tandon School of Engineering.

AI Risk Management Agentic AI

Jun 2, 2026cs.AI

Enhancing Operational Safety via Agentic Dialogue Hazard Identification Analysis

Operational safety in high-stakes domains such as industrial process control, autonomous, and safety-critical systems, demand reliable hazard identification. While large language models (LLMs) have shown promise in automating safety analysis tasks, single-turn, monolithic inference is brittle: it lacks the self-correction, deliberation, and contextual refinement that safety engineers apply iteratively. In this paper, we introduce HAZDIAL, a framework that investigates whether structured agentic dialogue-multi-agent, multi-turn interactions improves the quality of NLP- based hazard identification over single-pass baselines. We systematically compare two dialogue modalities: adversarial debate and constructive discussion, and propose an algorithm-based agentic interaction optimization. We evaluate all configurations against a curated golden dataset using standard classification metrics (accuracy, precision, recall, F1) and novel dialogue metrics. This work advances the intersection of dialogue systems, multi-agent reasoning, and AI safety, providing an empirical evidence for dialogue-driven hazard analysis.

Sanjay Das, Ran Elgedawy, Ethan Seefried +2

Oak Ridge National Laboratory Oak Ridge, Tennessee, USA

Multi-Agent LLM Systems AI Risk Management Multi-Agent Debate Multi-Agent Systems

Jun 2, 2026cs.AI

From Control Boundary to Insurance Claim: Reconstructing AI-Mediated Losses Through the CER Framework

AI losses that arise through an insured organization's generative or agentic AI system require state reconstruction, not merely event reconstruction, because the relevant state changes as the system reasons, retrieves, calls tools, and acts. The relevant question is not only what loss occurred, but what the system was allowed to do, what it actually did, and whether that reconstructed loss can support insurance claim recovery. This paper addresses losses in which the insured's AI system is in the causal chain, including externally triggered failures such as prompt injection, retrieval-augmented generation (RAG) poisoning, malicious tool output, credential misuse, and data poisoning. Specifically, this paper introduces CER, a use-case-level diagnostic for AI residual risk transfer. C (control boundary) asks whether the system had an enforceable operating envelope. E (evidence reconstruction) asks whether the system state and causal chain can be reconstructed from retained artifacts. R (insurance response) asks whether the reconstructed loss is insured: whether insurance coverage is available in the market and placed for the insured, together with the proof needed to support insurance claim recovery. The paper makes three contributions: it defines the AI-specific reconstruction problem, operationalizes that problem through CER, and specifies claim-grade evidence for AI reconstruction. Public examples include the reported PocketOS and Replit agentic database-deletion incidents and Moffatt v. Air Canada as an adjudicated output/reliance case. Keywords: AI systems; CER framework; residual risk transfer; agentic AI; generative AI; AI insurance; evidence reconstruction.

Alex Leung, Rex Zhang, Kentaroh Toyoda +1

AIFT

AI Accountability AI Risk Management AI Agent Governance

May 31, 2026cs.AI

GovAI-Pipe: A Layered AI Governance Pipeline for Citizen-Facing AI in Turkey's e-Government Gateway

Turkey's e-Government Gateway (e-Devlet) serves over 68 million registered users with more than 9,200 government services, and is increasingly integrating artificial intelligence into citizen-facing applications such as chatbot assistants and eligibility assessments. However, no structured technical governance infrastructure currently connects high-level AI policy frameworks, such as the EU AI Act, OECD AI Principles, and Turkey's own National AI Strategy, to the operational reality of deploying AI within a centralized e-government platform. We propose GovAI-Pipe, a four-layer governance pipeline designed using Design Science Research methodology that maps the AI model lifecycle to governance checkpoints: (1) pre-deployment validation for bias testing, explainability, and privacy impact assessment; (2) deployment governance for risk-tier classification and approval workflows; (3) runtime monitoring for drift detection, fairness tracking, and human-in-the-loop escalation; and (4) post-incident governance for audit trails, rollback, and citizen redress. Each layer is anchored to specific provisions of the EU AI Act, the GDPR data protection framework, and the National AI Strategy. We demonstrate the framework through two high-risk e-Devlet use cases, showing how GovAI-Pipe operationalizes governance principles as auditable, technical pipeline components.

Ahmet Kaplan

Department of Computer Science Istanbul Medipol University Istanbul, Türkiye

AI Accountability AI Risk Management AI Governance Human Oversight of AI

May 28, 2026cs.CY

AI Loss of Control Incident Management: Response & Resilience

Recent research demonstrating AI systems exhibiting deception and shutdown resistance suggests that AI loss of control (LOC) is an urgent policy concern , yet current literature focuses almost exclusively on alignment and prevention. To address this gap, this paper introduces a foundational framework and taxonomy for managing catastrophic AI LOC incidents. The taxonomy's first level distinguishes between scenarios where regaining control is 'extremely costly' versus 'impossible'. While impossible scenarios demand immediate resilience investments to fundamentally restrict an AI's attack surface , extremely costly scenarios require active incident management via Containment and Threat Neutralization. The framework further categorizes these manageable events into accidental LOC (requiring automated circuit-breaker responses) and adversarial LOC (requiring graduated escalatory measures). By mapping three severity classes to specific scenario matrices, this paper provides a concrete, proportional guide for managing unprecedented AI risks.

Ross Gruetzemacher

Wichita State University · Transformative Futures Institute

AI Risk Management AI Agent Safety

May 26, 2026q-fin.RM

Foundations of a Time-Consistent Counterfactual Actuarial Runtime for Autonomous AI Agents

We propose a foundational runtime actuarial layer for autonomous AI agents in which every side-effect-bearing action carries a time-consistent, counterfactual risk toll computed against a contractually fixed safe default, inside an explicit underwriting boundary. The framework treats per-action insurance as the primary unit of analysis and replaces post-hoc annual liability cover with a pre-action transaction layer. The paper establishes four structural results: (i) a well-defined counterfactual toll under a chosen safe-default mapping and continuation policy, with explicit non-uniqueness; (ii) a no-splitting property within an underwriting boundary that telescopes path-decomposed actions into a boundary potential, with a corollary tying gaming-resistance to boundary design; (iii) an irreversible-authority premium, split into a strictly positive action-level component and an if-and-only-if characterisation of the set-level robust capital increase; and (iv) a conservative runtime gating theorem that translates high-probability toll envelopes into an executed-action budget guarantee. The result is the mathematical base layer for a broader program: an empirical companion instantiates the runtime through an Actuarial Action Interface and authority-frontier experiments; a mechanism-design companion studies strategic operator incentives and cross-boundary aggregation; and a dynamic-underwriting companion studies experience rating and audit-replay calibration. The present paper states the primitive contract, the toll identity, the within-boundary no-arbitrage result, and the budget guarantee on which those later layers depend.

Hao-Hsuan Chen

Department of Risk Management and Insurance National Chengchi University

Counterfactual Evaluation AI Risk Management AI Agent Safety Runtime Assurance

May 25, 2026cs.AI

Insuring Every Action: An Authority Frontier Framework for Runtime Actuarial Control of Autonomous AI Agents

Autonomous AI agents increasingly issue side-effect-bearing actions: database mutations, refunds, payments, external commitments. We propose the Actuarial Action Interface (AAI), a deterministic runtime contract that prices each such action against a contractually fixed safe default under a time-consistent risk mapping, and gates execution against a per-boundary reserve capital budget. We then develop the Authority Frontier, an evaluation primitive measuring how much autonomous authority the runtime releases at each level of reserve capital. The framework provides (i) a deterministic quote-bind-commit protocol with toll-bounded capability tokens; (ii) a universal seven-class action taxonomy mapping heterogeneous tool calls to comparable authority units; (iii) replay determinism and pathwise reserve coverage under alpha-spending; (iv) cross-domain normalization via full reserve demand C_full and capital metrics Capital@k. We instantiate AAI across four agentic environments (database mutation, customer-service refund, and the public tau-bench retail and airline tool-use traces) and report a live Postgres panel in which three Azure-hosted models propose actions through the same contract. The frontier exhibits a common low-reserve refusal and intermediate-release pattern across domains, with saturation only where the budget grid reaches full reserve demand; required reserve capital varies by 22x (Capital@50 from 289 to 6457). The framework does not force domains into the same shape; it surfaces each domain's actuarial geometry. In the live panel the contract prevents realized loss across all three models at low budget while differing in underwriting persistence under denial: model identity is an actuarial underwriting variable. The contribution is a benchmark-ready evaluation framework for runtime actuarial control of autonomous-agent side effects.

Hao-Hsuan Chen

Department of Risk Management and Insurance National Chengchi University

AI Risk Management AI Agent Evaluation AI Agent Benchmarks Runtime Enforcement for AI Agents Runtime Assurance Tool-Use Authorization

May 19, 2026cs.CY

Reframing AI Loss of Control: What It Is, How to Have It, How to Lose It

At present, loss of control risks have gained much prominence in public discussion, particularly in relation to AI, with extensive discourse present among academics, frontier labs, and even governments. However, in the existing literature, the concept seems to rest on surprisingly weak foundations, where even those that discuss loss of control extensively do not first establish what control is and what exactly is being lost. Our paper aims to address these gaps. We establish a working definition of control by anchoring it to the "setting and getting of goals". Then, we discuss various aspects of control, built on foundational concepts from related fields like cybernetics, management control, and control theory. This includes who (or what) can be in control, and the things they require to be in control, such as the ability to set goals, having a functional control loop, having requisite variety, and having sufficient goal alignment. Once a framework for control is established, we then discuss how control can be lost, how AIs can contribute to such loss of control, and offer relevant recommendations for how one can maintain control. One interesting consequence of our work is that humanity, as individuals and as groups, can lose varying degrees of control as a result of AI behaviour that is far below the level of superintelligence; the potential for loss of control scenarios (as we define them) already exist, and have existed for a long time.

Ze Shen Chin, Maurice Chiodo, Dennis Müller +1

Oxford Martin AI Governance Initiative AI Standards Lab · Centre for the Study of Existential Risk, University of Cambridge · Institute of Mathematics Education, University of Cologne +1

AI Risk Management AI Governance Human Oversight of AI AI Safety

May 18, 2026cs.LG

Data Presentation Over Architecture: Resampling Strategies for Credit Risk Prediction with Tabular Foundation Models

Credit default prediction is a tabular learning problem with severe class imbalance, heterogeneous features, and tight latency budgets. Tabular Foundation Models (TFMs) approach this problem through in-context learning, which makes their predictions sensitive to how the context window is built. We benchmark four classical models and five TFMs on the Home Credit and Lending Club datasets, varying the context-construction strategy (seven options) and the context size (1K to 50K). On both datasets, the choice of context strategy explains more variance in AUC-ROC than the choice of TFM family: balanced and hybrid sampling add 3 to 4 AUC points over uniform sampling, and the gap exceeds the spread between TFMs. With a balanced context of 5K to 10K examples, the strongest TFMs reach the AUC of classical baselines trained on the full data, while also recovering meaningful default-class recall that default-threshold GBDTs do not. We frame this as evidence that context construction, rather than architecture choice, is the primary deployment lever for TFMs in imbalanced credit-risk settings.

Aditya Tanna, Mitul Solanki, Mohamed Bouadi +3

Lexsi Labs

Class-Imbalanced Learning Tabular Foundation Models AI Risk Management Credit Scoring Tabular ICL

May 18, 2026cs.LG

Foundation Models for Credit Risk Prediction: A Game Changer?

Predictive models play a pivotal role in credit risk management, guiding critical decisions through accurate estimation of default probabilities and losses. Extensive research has introduced new modeling techniques, complemented by large-scale benchmarking studies consolidating the state-of-the-art. Today, quasi-standards such as gradient-boosting models paired with SHAP explainers have emerged, yet continuous improvement of risk models remains a top priority. Concurrently, rapid advancements in AI, most notably large language models, have disrupted predictive modeling paradigms. Foundation models, pretrained on extensive datasets from diverse domains, have demonstrated remarkable performance by leveraging prior knowledge. While prevalent in natural language processing and computer vision, foundation models for tabular data have only recently emerged. We conjecture that pretraining on out-of-domain data is particularly beneficial in small-data settings, such as SME lending or specialized corporate portfolios, and may help address longstanding challenges including low default portfolios and class imbalance. This paper benchmarks recently proposed tabular foundation models against a broad set of competitors, including established and advanced machine learning techniques, across two core tasks: PD and LGD modeling. Our evaluation encompasses various datasets, performance indicators, and experimental conditions. We find that tabular foundation models generally perform best across datasets and tasks. Moreover, they offer significant improvement in predictive performance as dataset size shrinks. These results are remarkable given that the models are tested out-of-the-box, without hyperparameter tuning, ensuring ease of use and mitigating computational costs.

Bart Baesens, Andreas Goethals, Stefan Lessmann +10

Faculty of Economics and Business, KU Leuven, Belgium · School of Business and Economics, Humboldt University of Berlin, Germany · Department of Statistical and Actuarial Sciences, Western University, Canada +8

Tabular Foundation Models AI Risk Management Credit Scoring Tabular Prediction

May 16, 2026cs.CR

STRIDE-AI: A Threat Modeling Framework for Generative AI Security Assessment

Traditional cybersecurity methodologies target deterministic systems and fail to address the probabilistic nature of AI, leaving systems vulnerable to attack vectors such as model inversion, data poisoning, and prompt injection. Recent industry reports indicate that a majority of organizations deploying AI lack a dedicated security strategy, with adversarial attacks increasing rapidly year-over-year. We present \textit{STRIDE-AI}, a framework that bridges the gap between high-level risk standards (NIST AI RMF) and technical vulnerability taxonomies (OWASP LLM Top 10). The framework defines a six-phase assessment lifecycle, introduces a threat modeling adaptation of classical STRIDE for AI systems, and is operationalized through a purpose-built web tool. We provide an initial validation of the approach through a black-box assessment of a deployed LLM chatbot, which successfully reduced the attack success rate from 80% to 15% in our sandbox case study.

Tsafac Nkombong Regine Cyrille, Franziska Schwarz

SRH University of Applied Sciences Heidelberg School of Technology and Architecture CyberMACS (Applied Cybersecurity) Berlin, Germany · Universidad de Granada Facultad de Ciencias Econ´omicas y Empresariales Granada, Spain

AI Assurance AI Risk Management LLM Security

May 11, 2026cs.AI

MATRA: Modeling the Attack Surface of Agentic AI Systems -- OpenClaw Case Study

LLMs are increasingly deployed as autonomous agents with access to tools, databases, and external services, yet practitioners (across different sectors) lack systematic methods to assess how known threat classes translate into concrete risks within a specific agentic deployment. We present MATRA, a pragmatic threat modeling framework for agentic AI systems that adapts established risk assessment methodology to systematically assess how known LLM threats translate into deployment-specific risks. MATRA begins with an asset-based impact assessment and utilizes attack trees to determine the likelihood of these impacts occurring within the system architecture. We demonstrate MATRA on a personal AI agent deployment using OpenClaw, quantifying how architectural controls such as network sandboxing and least-privilege access reduce risk by limiting the blast radius of successful injections.

Tim Van hamme, Thomas Vissers, Javier Carnerero-Cano +4

DistriNet, KU Leuven, 3001 Leuven, Belgium · IBM Research · CISPA Helmholtz Center for Information Security +2

AI Risk Management AI Agent Security

May 10, 2026cs.DL

The Biosecurity Blind Spot: Systematic Dual-use Detection in Open Science Infrastructure

AI is transforming life sciences research at unprecedented speed, accelerating discovery across protein structure prediction, genome modeling, and drug development (Jumper et al., 2021; Mak et al., 2024). Yet this rapid advancement, coupled with the open science movement, introduces significant dual-use research concerns that have received limited empirical scrutiny. Here we present the first systematic analysis of dual-use research of concern (DURC) content on open preprint servers. We screened ~52,000 bioRxiv preprints (2024-2025) using a hybrid pipeline of lexical filtering and large language model (LLM) evaluation, scoring metadata across nine DURC, three PEPP, and five governance categories aligned with U.S. and Australia Group oversight frameworks. Our analysis reveals that dual-use-adjacent knowledge is routinely present in openly accessible titles and abstracts, often exceeding established risk thresholds even in studies with legitimate public health objectives. While this mapping captures surface-level information diffusion, it does not measure operational capability, downstream misuse potential, or the substantial technical and biosafety barriers that constrain harmful application. We argue that institutional review processes, funding requirements, and preprint platform policies must evolve to incorporate proactive, metadata-level monitoring without compromising scientific transparency. Ultimately, harmonizing controlled-access mechanisms for high-risk methodologies with open summaries of scientific contributions offers a pragmatic framework for governing AI-accelerated biology at scale.

Vasudha Sharma, Chakresh Kumar Singh, Jayesh Choudhari +1

1LophiLabs · 2Independent.

AI Risk Management

May 9, 2026cs.CY

The Challenges of Balancing AI Compliance and Technological Innovations in Critical Sectors: A Systematic Literature Review

The rapid integration of artificial intelligence (AI) into critical infrastructure including healthcare, finance, energy, and defense, offers transformative benefits but also conflicts with evolving regulatory and governance frameworks. This paper presents a systematic literature review (SLR) to examine the challenges of balancing AI compliance and technological innovation across critical infrastructure sectors. The review follows established SLR guidelines to extract and synthesize insights from peer-reviewed articles, report, and institutional sources published between 2020-2025. The study identifies three interrelated challenges: fragmented regulations, excessive compliance burdens for smaller to medium enterprises (SMEs), and misaligned governance models. To address these challenges, the study highlights practical governance strategies, including risk-tiered regulation, compliance by design, and explainable AI, to support scalable and trustworthy AI deployment in critical sectors. Key contributions include a concise mapping of core AI-governance challenges and a conceptual diagram illustrating their overlap, as well as actionable strategies for policymakers and practitioner to harmonize oversight with innovation.

Ayush Enkhtaivan, Chinazunwa Uwaoma

Claremont Graduate University

AI Risk Management AI Governance

May 7, 2026stat.ML

Neural-Actuarial Longevity Forecasting: Anchoring LSTMs for Explainable Risk Management

Traditional multi-population models, such as the Li-Lee framework, rely on the assumption of mean-reverting country-specific deviations. However, recent data from high-longevity clusters suggest a systemic break in this paradigm. We identify a stationarity paradox where mortality residuals in countries like Sweden and West Germany exhibit persistent unit roots, leading to a systematic mispricing of longevity risk in linear models. To address these non-linearities, we propose Hybrid-Lift, a neural-actuarial framework that combines Hierarchical LSTM networks with a Mean-Bias Correction (MBC) anchoring mechanism. Positioned as a governance-friendly model challenger rather than a replacement of classical approaches, the framework exhibits selective superiority on out-of-sample validation (2012-2020): it outperforms Li-Lee by 17.40% in Sweden and 12.57% in West Germany, while remaining comparable for near-linear regimes such as Switzerland and Japan. We complement the predictive model with an integrated governance suite comprising SHAP-based cross-country influence mapping, a dual uncertainty framework for regulatory capital calibration (Swiss ES 99.0% of +1.153 years), and a reverse stress test identifying the critical shock threshold for solvency buffer exhaustion. This research provides evidence that neural networks, when properly anchored by actuarial principles, can serve as effective model challengers for longevity risk management under the SST and Solvency II standards.

Davide Rindori

SAV Actuarial Candidate, ETH Zürich · PhD in Physics, University of Florence (2021)

Long-Term Time Series Forecasting AI Risk Management Long Short-Term Memory Networks Mortality Prediction

May 7, 2026cs.AI

Agentic, Context-Aware Risk Intelligence in the Internet of Value

The Internet of Value (IoV) is a heterogeneous, partially-trusted network in which the dominant marginal risk is composite (route, sentiment, liquidity, and the policy a system is willing to commit to) rather than a property of any single chain. We argue that a risk primitive adequate for this regime is a composition of five engines: a prediction engine over price, liquidity, volatility, and route health; a Bittensor verification subnet that decentralises and economically scores prediction outputs; a sentiment-fusion engine over text, on-chain flow, and grey-literature feeds; an agentic engine under constitutional, role-bound action constraints; and an API-risk and scenario engine that converts forecasts into pre-committed action programs in the sense of Monte-Carlo scenario generation. We anchor the architecture in two empirical artefacts: a 27-hour policy-constrained liquidity stress-response experiment on Solana, and a 168-hour prediction-router calibration arc reported with explicit class-imbalance honesty. The case study supports deployability; the validator-loss decomposition is stated formally and is falsifiable.

Basel Magableh, OmniRisk Research

School of Computer Science, Technological University Dublin, Ireland · Rayachain Lab, Dublin, Ireland

Quantitative Finance AI Risk Management

May 6, 2026cs.CR

Agentic AI and the Industrialization of Cyber Offense: Forecast, Consequences, and Defensive Priorities for Enterprises and the Mittelstand

Agentic AI systems can plan, call tools, inspect code, interact with web applications, and coordinate multi-step workflows. These same capabilities change the economics of cyber offense. The central near-term risk is not that every low-skill criminal immediately becomes a frontier exploit researcher; it is that agentic AI compresses the attack lifecycle by lowering the cost of reconnaissance, phishing, credential abuse, vulnerability triage, exploit adaptation, and post-compromise decision support. This paper synthesizes current public evidence from national cybersecurity agencies, industry threat reports, agent security guidance, and research on LLM agents cyber capabilities. It introduces a Three Channel Agentic Cyber Risk Model and an Agentic Attack Compression Model, uses the 2026 Linux kernel Copy Fail incident as a case study for foothold-to-root acceleration, and develops a 2026 to 2028 forecast for large enterprises and the German and European Mittelstand. The paper concludes with a prioritized defense roadmap. Organizations should treat agentic AI security as an immediate operational problem: identity, phishing resistant authentication, patch velocity, CI/CD and Linux/container hardening, agent governance, telemetry, and recovery readiness must be strengthened now.

Christopher Koch

Independent Researcher

AI Risk Management Cybersecurity AI Agent Security

May 6, 2026q-fin.RM

The Insurability Frontier of AI Risk: Mapping Threats to Affirmative Coverage, Silent Exposures, and Exclusions

The rapid diffusion of agentic AI has created a new coverage problem for commercial insurance: some AI-mediated losses are now affirmatively insured, some create silent-AI exposure under legacy cyber, technology errors-and-omissions (E&O), directors-and-officers (D&O), employment practices liability (EPLI), crime, and media policies, and others are being actively excluded. This paper maps that emerging boundary by coding 55 AI threat classes against 26 insurance products, endorsements, and exclusion regimes using public carrier materials and OWASP/MITRE threat catalogs. We identify a four-tier insurability frontier: affirmatively insured perils, silent-AI exposures, actively excluded perils, and perils outside conventional private insurance structures. Our coding measures publicly claimed positioning rather than executed contract wording; the headline statistics describe what carriers publicly state about coverage, not what would be paid in any specific claim. Three patterns emerge. First, affirmative AI coverage is beginning to differentiate by primary risk emphasis: public materials often position Munich Re around model performance and drift, Armilla and parts of the Lloyd's market around hallucination and broader AI liability, Tokio Marine Kiln and CFC around IP and technology E&O concerns, Apollo ibott around emerging autonomous system liability, and Coalition around deepfake and AI-enabled cyber response. Second, legacy lines retain silent-AI exposure where AI is an instrumentality rather than the legal cause of loss. Third, foundation model concentration is the clearest genuinely novel insurability frontier because upstream model failure can correlate losses across many cedents at once; the relevant market design question is which insurability constraint each candidate structure relaxes, not merely which systemic risk template exists.

Alex Leung, Rex Zhang, Ervin Ling +2

AIFT

AI Risk Management

May 2, 2026cs.CY

The Case for ESM3 as a General-Purpose AI Model with Systemic Risk Under the EU AI Act

Due to ambiguity in the wording of the EU AI Act, we examine the question of to what extent frontier biological foundation models such as ESM3 are subject to obligations for general-purpose AI models with systemic risk under the EU AI Act. In this paper, we map ESM3 to the biorisk chain, and conclude that it would be desirable if the providers of ESM3 and similar biological models were subject to these obligations, which would require them to assess and mitigate dual-use risks from their models. We then perform an analysis, comparing the attributes of ESM3 to the classification criteria in the AI Act and the supporting material. We conclude that at this time, ESM3 does not appear to be meaningfully regulated by the Act. We then propose remedies to correct the situation.

Taro Qureshi, Jacob Griffith, Koen Holtman +3

Northeastern University London · London School of Economics and Political Science · AI Standards Lab +2

AI Risk Management AI Governance