ASIC warns of governance gap in AI adoption

ASIC report warns governance gap could emerge in AI adoption by licensees. 

The Australian Securities and Investments Commission (ASIC) is urging financial services and credit licensees to ensure their governance practices keep pace with their accelerating adoption of AI. The call comes as ASIC’s first state- of-the-market review of the use and adoption of AI by 23 licensees found there was potential for governance to lag AI adoption, despite current use being relatively cautious.

ASIC chair Joe Longo said making sure governance frameworks are updated for the planned use of AI is crucial to licensees meeting future challenges posed by the technology. “Our review shows AI use by the licensees has, to date, focused predominantly on supporting human decisions and improving efficiencies,” he said. “However, the volume of AI use is accelerating rapidly, with around 60 per cent of licensees intending to ramp up usage, which could change the way AI impacts consumers.”

ASIC findings revealed nearly half of licensees did not have policies in place that considered consumer fairness or bias. Even fewer had policies governing the disclosure of AI use to consumers. “It is clear that work needs to be done, and quickly, to ensure governance is adequate for the potential surge in consumer-facing AI,” said Longo.

AI could bring significant benefits, but without governance processes keeping pace, major risks could emerge.