ASIC's report highlights a significant increase in the deployment of complex AI systems, including generative AI, across the financial sector. While these technologies offer opportunities for enhanced efficiency and personalised services, they also introduce potential risks such as bias, misinformation, and exploitation of consumer vulnerabilities.
One of the primary concerns identified is the lag in governance structures adapting to the swift pace of AI adoption. Many licensees have not updated their risk management frameworks to effectively oversee AI-driven processes, potentially leaving them unprepared to address associated challenges.
For consumers, particularly those seeking online financial services, the integration of AI can lead to more tailored product offerings and improved user experiences. However, the absence of robust governance mechanisms may result in unintended consequences, such as biased decision-making or compromised data security.
ASIC urges financial institutions to proactively enhance their governance practices to keep pace with AI advancements. This includes implementing comprehensive risk management strategies, ensuring transparency in AI applications, and prioritising consumer protection.
In conclusion, while AI presents transformative potential for the financial services industry, its adoption must be accompanied by diligent governance and risk management. ASIC's review serves as a call to action for institutions to align their practices with technological advancements, ensuring a secure and equitable financial landscape for all Australians.
Published: Tuesday 25th November, 2025
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