ASIC's Joe Longo warns banks 'cutting edge AI can't leave customers bleeding'
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The news: ASIC chair Joe Longo will use a speech on Wednesday to put banks and corporate boards on notice to proceed cautiously with artificial intelligence (AI) or face litigation.
What they said: In a speech to be delivered at the annual conference of the Australian Banking Association (ABA) in Sydney, Longo will lay down ASIC’s latest view on AI and urge responsible regulation and development.
“My position – and ASIC’s – is that we should not rush into more AI regulation,” Longo will say, arguing that more laws will produce even greater legal complexity. “[But] that’s not to say that new regulation won’t be needed.”
“It’s already apparent that AI could present some challenges for reputation in data and information gathering. That could, in theory, stretch and test our ability to identify and assess systemic harms. These are bridges we are yet to cross but they are certainly looming.”
While ASIC will urge a slow and steady approach to the rapidly-developing technology, the regulator says companies and boards will still have to meet their obligations as they pertain to AI.
“ASIC is continuing to monitor how entities are using AI, and we will take enforcement action where appropriate, where we see misconduct occurring. So yes, you will get in trouble when technology is not used responsibly,” Longo will say.
“Which then leads us to the question, ‘What’s the benchmark for good AI innovation?’ And I think the answer is pretty clear: good AI innovation keeps the customer front and centre.”
ASIC provides the example of the ‘Better Banking’ work it has done with low-income bank customers, resulting in the refund of millions of dollars in bank fees and the migration of eligible customers to low-fee accounts.
“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,” Longo will say.
“To put it bluntly: cutting-edge technology can’t leave your customers bleeding. 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.”
