Global financial regulators have laid out plans for closer monitoring of the risks as banks and other parts of the financial industry ramp up the use of artificial intelligence (AI).

Concerns raised by authorities include that too many institutions end up using the same AI models and specialised hardware, which could lead to herd-like behavior.

"This heavy reliance can create vulnerabilities if there are few alternatives available," the report by the Financial Stability Board, the G20's risk watchdog, said.

A separate study published by central bank umbrella group, the Bank for International Settlements (BIS), said there was an "urgent need" for central banks, financial regulators and supervisory authorities to "raise their game" in relation to AI.

"There is a need to upgrade their capabilities both as informed observers of the effects of technological advancements and as users of the technology itself," the BIS said.