Financial Services Agency Budget Reaches Record High, Strengthening Oversight of Cryptocurrency and AI

Record High Budget Request

The Financial Services Agency (FSA) is adjusting its budget request for fiscal year 2027, aiming for a record high of 40 billion yen to enhance digital responses in financial administration, as reported by the Nikkei and Kyodo News on the 24th. This represents an expected increase of about 60% compared to the previous year.

In the digital investment sector, the FSA plans to establish a market monitoring and surveillance infrastructure utilizing AI (artificial intelligence). In addition to strengthening cybersecurity measures for financial institutions, it will also promote support for transitioning to post-quantum cryptography (PQC), which is considered difficult to decipher even with quantum computers.

Historically, the FSA's budget has been smaller compared to other ministries, typically around 20 billion yen. With this budget request, it is expected to reach the significant milestone of 40 billion yen, marking an unprecedented scale.

The agency will also expand support for regional financial institutions. It is expected to promote growth support for companies receiving loans from local banks and credit unions, as well as business revitalization support through demonstration projects and talent matching platforms.

As a specific measure, training will be conducted for executives and staff of regional banks, credit unions, and credit associations. The agency aims to enhance staff expertise in collaboration with public-private funds and securities companies that support regional economic revitalization.

Strengthening the System

The FSA is also seeking to enhance its organizational structure by increasing the number of specialized personnel responsible for monitoring cryptocurrency exchanges and addressing the risks associated with advanced AI, known as "Frontier AI," which is feared to be misused in cyberattacks.

On the other hand, credit unions and credit associations have faced a series of scandals in recent years, prompting the establishment of a new "Inspection Planning Office (tentative name)" that will serve as the command center for financial institution inspections. The specific budget amount will be determined after future assessments by the Ministry of Finance.

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