Critical infrastructure Archives | Digital Watch Observatory

FCA outlines AI-driven plan to modernise financial regulation

The UK’s Financial Conduct Authority (FCA) has outlined plans to integrate AI and data-driven tools into its regulatory processes as part of its 2026/27 work programme to become a more efficient and effective regulator.

The programme includes developing an internal authorisation tool to speed up approvals and using generative AI to review documents and support supervision, while maintaining human decision-making at the core of regulatory actions.

The FCA said it will also test automated data-sharing in a sandbox environment, expand its Supercharged Sandbox for firms developing AI-based financial products, and invest in analytics to better identify risks and prioritise cases.

Measures to reduce burdens on firms include removing certain data reporting requirements, simplifying digital processes and improving authorisation timelines, alongside efforts to enhance firms’ experience through new tools and feedback mechanisms.

The regulator also plans to support economic growth and consumer protection by advancing measures such as regulating buy now pay later products, speeding up IPO processes, expanding international presence, and addressing emerging risks, including the use of general-purpose AI in financial decision-making.

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National security rules to prioritise UK contracts in AI, steel and shipbuilding

The UK government has announced new procurement guidance that will treat shipbuilding, steel, AI, and energy infrastructure as critical to national security, with departments directed to prioritise British businesses where necessary to protect national security. The press release was published on 26 March by the Cabinet Office and its Minister, Chris Ward.

According to the government, the new approach is intended to respond to recent supply-chain fragility and strengthen domestic capacity in sectors it describes as vital to national security. The guidance is presented as the first clear framework for how departments can protect the UK’s economic security and build resilience in the four named sectors.

Additional measures in the package go beyond sector prioritisation. The government says departments will either use British steel or provide a justification if steel is sourced from overseas, linking the change to the UK Steel Strategy launched the previous week. Officials also say the reforms support the government’s Modern Industrial Strategy and follow the publication of the National Security Strategy.

Procurement reform is another part of the package. Under a new Public Interest Test, departments will be asked to assess whether outsourced service contracts worth more than £1 million could be delivered more effectively in-house. The government says the test will cover more than 95% of central government contracts by value.

Community impact is also being built into the contracting framework. Departments will be required to publish and report annually on a specific social value goal for contracts above £5 million, which the government says will cover more than 90% of central government contracts by value. Companies bidding for public contracts are also being encouraged to include commitments on local jobs, skills, and apprenticeships.

The press release also says a new suite of AI tools has been developed to streamline the commercial process. Contract terms will be simplified, and additional business information will be integrated into a central platform, with the stated aim of reducing repeated submissions by smaller businesses bidding for multiple contracts.

Chris Ward said: ‘This Government is backing British businesses and the working people who power them. These reforms are about using the full weight of Government spending to support British jobs, protect our national security and grow our economy.’ He added: ‘Whether you make steel in Scunthorpe, build ships on the Clyde or run a small tech firm in the Midlands, this Government is on your side.’

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VTC expands AI training across all programmes in Hong Kong

The Vocational Training Council (VTC) has introduced an ‘AI for All’ strategy to integrate AI training across its programmes, aiming to support Hong Kong’s ambition to strengthen its innovation and technology sector.

The initiative aligns with broader policy priorities, including the ‘AI Plus’ approach outlined in national planning frameworks and Hong Kong’s budget, which emphasise integrating AI across industries while addressing a shortage of skilled professionals.

Under the ‘AI+Professional’ model, all Higher Diploma students are required to study IT modules covering prompt engineering, generative AI, and AI ethics and security, with training adapted to disciplines such as engineering, design, and information technology.

The council has also partnered with technology companies through memorandums of understanding. It provides ongoing training for employees in government and industry, while offering internal AI tools and a ‘Virtual Tutor’ platform to support teaching and learning.

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EU opens probe into Snapchat child safety compliance

The European Commission has launched formal proceedings to assess whether Snapchat is complying with child protection obligations under the Digital Services Act. The investigation focuses on whether the platform ensures adequate safety, privacy, and security for minors.

Authorities suspect Snapchat may have failed to prevent exposure of children to grooming attempts, recruitment for criminal activity, and content linked to illegal goods such as drugs, vapes, and alcohol.

Concerns also include whether minors can be effectively prevented from accessing the platform or interacting with adults posing as peers.

The inquiry will examine age assurance methods, default account settings, reporting tools, and the spread of illegal content. Regulators argue that self-declared age may be insufficient, while default settings and recommendations may expose minors to risks.

The Commission will now gather further evidence through information requests, inspections, and interviews, and may take enforcement actions, including interim measures or penalties.

National regulators will support the investigation as part of coordinated oversight under the Digital Services Act.

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UK tightens sanctions on crypto-linked scam networks

The UK has stepped up its crackdown by sanctioning a crypto marketplace tied to major scam centres in Southeast Asia. Measures aim to disrupt the sale of stolen personal data and limit the financial infrastructure enabling online fraud targeting British victims.

Authorities also targeted operators behind ‘#8 Park’, Cambodia’s largest scam compound, believed to house up to 20,000 trafficked workers. Many individuals forced to run scams were lured with false job offers before being coerced into fraudulent activity under severe threats.

Sanctions extend to key entities and individuals connected to the wider network, including those facilitating crypto laundering and cross-border financial flows. Earlier UK action froze over £1 billion in assets and helped shut down platforms used for laundering illicit funds.

Officials said the measures will isolate these operations from the crypto ecosystem and freeze UK-based assets. The measures come ahead of an international summit in June aimed at strengthening global coordination against illicit finance and digital fraud.

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Zimbabwe advances AI national strategy with UNESCO support

Zimbabwe has launched a National Artificial Intelligence Strategy for 2026 to 2030, marking a significant step towards shaping its digital future instead of relying solely on traditional development pathways.

Announced by President Emmerson Mnangagwa in Harare, the strategy sets out a national framework for the responsible use of AI to support innovation, improve public services, and expand economic opportunities across sectors such as agriculture, healthcare, education, finance, and public administration.

The strategy places strong emphasis on building digital infrastructure, developing AI skills, and strengthening research and innovation ecosystems.

Officials highlighted the importance of governance frameworks to ensure that AI systems remain transparent, ethical, and aligned with national priorities instead of advancing without oversight.

The initiative reflects a broader effort to position Zimbabwe within the evolving technological landscape of the fourth industrial revolution while promoting sustainable economic growth.

Development of the strategy was supported by UNESCO, working alongside national institutions and stakeholders from academia, industry, and civil society.

The process was informed by the Artificial Intelligence Readiness Assessment Methodology and aligned with UNESCO Recommendation on the Ethics of Artificial Intelligence, promoting a human-centred approach that prioritises human rights, fairness, and transparency.

Regional initiatives across Southern Africa have also contributed to strengthening AI adoption readiness through similar assessment frameworks.

Looking ahead, Zimbabwe aims to translate the strategy into concrete investments in infrastructure, talent development, and innovation ecosystems.

International partners, including the UN, have expressed support for implementation efforts, emphasising the importance of inclusive growth and equitable access to digital opportunities.

By combining national leadership with international collaboration, Zimbabwe seeks to ensure that AI benefits communities across urban and rural areas rather than widening existing socioeconomic divides.

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New AI safety policies target teen protection in apps

OpenAI has released a set of prompt-based safety policies to help developers build safer AI experiences for teenagers. The tools work with the open-weight model gpt-oss-safeguard, turning safety requirements into practical classifiers for real-world use.

The policies address teen risks, including graphic violence, sexual content, harmful body image behaviour, dangerous challenges, roleplay, and age-restricted goods and services. Developers can use them for both real-time filtering and offline content analysis.

The framework was developed with input from organisations such as Common Sense Media and everyone.ai to improve clarity and consistency in teen safety rules. The initiative also responds to long-standing challenges in translating high-level safety goals into precise operational systems.

Open-source availability through the ROOST Model Community allows developers to adapt and expand the policies for different use cases and languages. The framework is a foundational step, not a complete solution, encouraging layered safeguards and ongoing refinement.

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Google sets 2029 deadline for post-quantum cryptography migration

A transition to post-quantum cryptography by 2029 is being led by Google, aiming to secure digital systems against future quantum computing threats instead of relying on existing encryption standards.

The move reflects growing concern that advances in quantum hardware and algorithms could eventually undermine current cryptographic protections, particularly through attacks that store encrypted data today for decryption in the future.

Quantum computers are expected to challenge widely used encryption and digital signature systems, prompting the need for early transition strategies.

Google has updated its threat model to prioritise authentication services, recognising that digital signatures pose a critical vulnerability if not addressed before the arrival of quantum machines capable of cryptanalysis.

The company is encouraging broader industry action to accelerate migration efforts and reduce long-term security risks.

As part of its strategy, Google is integrating post-quantum cryptography into its products and services.

Android 17 will include quantum-resistant digital signature protection aligned with standards developed by the US’s National Institute of Standards and Technology. At the same time, support has already been introduced in Google Chrome and cloud platforms.

These measures aim to bring advanced security technologies directly to users instead of limiting them to experimental environments.

By setting a clear timeline, Google aims to instil urgency and direction across the wider technology sector.

The transition to post-quantum cryptography is expected to become a critical step in maintaining online security, ensuring that digital infrastructure remains resilient as quantum computing capabilities continue to evolve.

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OpenAI launches a public Safety Bug Bounty programme

OpenAI has introduced a public Safety Bug Bounty programme to identify misuse and safety risks across its AI systems. The initiative expands the company’s existing vulnerability reporting framework by focusing on harms that fall outside traditional security definitions.

The programme covers AI threats such as agentic risks, prompt injection, data exfiltration, and bypassing platform integrity controls. Researchers are encouraged to submit reproducible cases where AI systems perform harmful actions or expose sensitive information.

Unlike standard security reports, the initiative accepts safety issues that pose real-world risk, even if they are not classified as technical vulnerabilities. Dedicated safety and security teams will assess submissions and may be reassigned depending on relevance.

The scheme is open to external researchers and ethical hackers to strengthen AI safety through broader collaboration. OpenAI says the approach is intended to improve resilience against evolving misuse as AI systems become more advanced.

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EU strengthens semiconductor strategy through Chips Act dialogue

Executive Vice-President Henna Virkkunen will host a high-level dialogue in Brussels to assess the implementation of the European Chips Act Regulation and gather industry feedback ahead of its planned revision.

Stakeholders from across the semiconductor ecosystem are expected to exchange views and present recommendations to shape future policy direction.

An initiative that forms part of the broader strategy led by the European Commission to reinforce technological sovereignty and competitiveness, rather than relying heavily on external suppliers.

The Chips Act seeks to strengthen Europe’s semiconductor ecosystem, improve supply chain resilience, and reduce strategic dependencies in critical technologies.

The dialogue follows a public consultation and call for evidence conducted in autumn 2025, with findings set to inform the upcoming legislative revision.

Industry representatives will provide direct input through a report outlining challenges, opportunities, and proposed policy adjustments, contributing to a more targeted and effective framework for semiconductor development.

Looking ahead, the revision of the Chips Act will be integrated into a wider Technological Sovereignty package designed to boost the capacity of Europe’s digital industries.

By combining stakeholder engagement with policy reform, the European Commission aims to ensure that semiconductor innovation and production can expand across the EU rather than remain constrained by reliance on external suppliers.

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