Australia’s prudential regulator APRA warned that governance and security systems to control artificial intelligence are failing to keep pace as banks and other financial firms rapidly expand adoption.
On April 30 local time, fintech outlet Finextra reported that APRA said in a letter to the industry that governance, risk management, assurance and operational resilience frameworks are inadequate compared with the growing scale, speed and complexity of AI use.
The letter followed a targeted supervisory review APRA conducted late last year. After examining how financial firms adopt and control AI, APRA concluded that the spread of advanced AI is creating new financial and operational vulnerabilities. It said information security frameworks are not keeping up with the pace of change, and that the speed of identifying and fixing vulnerabilities must also increase to match the level of threats accelerated by AI.
The regulator also said frontline AI models…
