Australian regulator to review banking sector AI use and customer impacts

By Scott Murdoch

SYDNEY, Sept 30 (Reuters) - Australia's corporate regulator said on Wednesday it would formally review the country's banking sector's usage of AI in dealing with customers.

The Australian Securities and Investments Commission (ASIC) warned in May the banks should take urgent ‌action on tackling potential cyber risks from frontier AI systems.

• A letter from ASIC sent to the banks on Wednesday, reviewed by Reuters, said the review would focus on new and proposed use cases of AI by banks and the potential impact on customers.

• ASIC said it was aware of the potential benefits created by AI and automation for the banks but was keen to ensure customers would remain well protected through decision making and lending processes.

• ASIC said earlier in August that had it hosted nine roundtable events with 600 participants from across Australia's financial services sector to survey AI practices and behaviour in the workforce.

• It said one of the key themes which emerged was how banks and boards deal with increased cybersecurity threats and the pace at which AI-led attacks can occur.

• A group of major banks ING INGA.AS, NatWest NWG.L, Bank of America BAC.N Capital One COF.N and Commonwealth Bank of Australia CBA.AX said earlier this month customers were enthusiastic about the potential of agentic commerce ​and keen to enable it.

• But the banks warned AI technology was advancing ​faster than many industry standards and consumer protections.