The Australian Securities and Investments Commission (ASIC) says that while business enthusiasm for artificial intelligence is high, many questions about practical use of the technology still need answering.
ASIC chair Joe Longo said that while parts of the finance sector, in particular, had been “early adopters of new technology” to drive efficiency, advances such as generative AI posed risks that are yet to be addressed.
Longo said one “very practical” concern around AI is that “if you can’t explain how a particular system works … how can you justify using it?”.
“While everyone, from consumers to corporates, is talking about AI as a brand new thing, we in this room know that the financial markets have been at the forefront with algorithmic trading and using AI in electronic markets for over a decade,” he told a financial conference.
“We can expect AI to continue to drive efficiencies in risk management and operations, such as price prediction, hedging, fraud detection, and so on.
“But at the same time, AI remains an area of rapid change and expansion. Recent developments, especially in the field of generative AI, represent a step change, and potentially create new and different risks and issues.
“The speed at which things are changing also seems to be accelerating.
“What is clear is that there is as yet no real consensus on how to regulate AI, if at all.”
Longo pointed to various global initiatives underway to tackle AI regulations including the European Commission’s proposed laws, together with work in the UK, China and Canada.
He also urged industry participants to submit views to the current Safe and Responsible AI in Australia discussion paper process.
Longo said that ASIC is also working out how deeply it needs to insert itself into the AI discussion and experimentation.
“As with any new technology, to the extent that AI affects that ecosystem, to that extent we will be involved,” he said.
“I want to take this opportunity, as an aside, to emphasise that ASIC has AI as a high and important priority .. for the whole economy, including consumers and small business.”
ASIC is particularly monitoring for evidence of “fear of being ‘left behind’”, which Longo said could create unintended consequences as users of the technology “may rush too quickly into innovations without applying appropriate controls and proper governance”.
Longo said that businesses should ultimately “set the pace”, however, with embracing explainability and other implications of AI use, such as those related to information security.
He added that when “it comes to tech, data, and transparency, we can only maintain a market characterised by confidence and integrity if we work together.”
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