Australia’s banks should use artificial intelligence to enrich their customers’ lives and help address hesitation towards the technology, the corporate watchdog says.
The nation should not rush into heaping more regulation on AI as guardrails are already in place and more rules could have a chilling effect on innovation, ASIC chair Joe Longo will tell a roomful of bankers in Sydney on Wednesday.
Mr Longo has previously cautioned against over-regulation more generally, and will again urge lawmakers not to address a perceived problem by simply throwing more rules at it.
“The reality is, as I have said publicly before, the more specific and narrowly targeted regulation becomes, the more complex it becomes,” Mr Longo will say in a speech at an Australian Banking Association conference.
“It gets harder to understand, harder to comply with, and harder for regulators to enforce.”
That results in a burden borne by all Australians through lost time and productivity, and makes it harder for regulators to combat scams, predatory lending and other unfair practices.
“And it becomes a handbrake on innovation, when you have got to spend more on compliance lawyers than coders.”
While ASIC is not rushing to impose new regulation, Mr Longo acknowledges more may be needed in future.
But his focus is on applying existing laws. Guardrails already exist, and regulators just need to be more imaginative about how to apply them.
“In other words, we’ve got to kick the tyres a bit and see just how far our technology-neutral framework will flex,” Mr Longo will say.
ASIC is still keeping a close eye on how businesses adopt AI, and Mr Longo wants to see banks using AI to actually improve their customers’ lives.
This could include preventing low-income customers from paying millions of dollars in fees they were entitled to avoid, as ASIC found in a report on the banks’ treatment of Indigenous customers.
He cited the example of a single mum from South Australia who was charged more than $2600 in overdraw fees over five years.
“It would be a true win for customer-centric banking if your algorithm prompted you to serve your customers better before an ASIC report did,” he will say.
“We’ve already seen that customer trust in AI and its potential to improve customer service is eroding. If banks get this wrong, we’re likely to see a significant setback in AI legitimacy and trust.”
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