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ASIC chair tells regulators it’s not too late to use generative AI

23 May 2024
asic chair tells regulators it s not too late to use gen ai

The ATO is not the only regulator keeping a close eye on AI, both in its own compliance activities and in policing its use among Australian businesses.

ASIC chair Joe Longo has called on Australia’s regulators to close the technology gap needed to make more effective use of AI.

Australia’s tax and financial regulators have made cautious use of emergent AI technologies over the past few years, yet Longo seemed to address a regulatory cohort at risk of falling behind.

“While generative AI technology is well advanced – and its development continues apace – we should not cede to defeatist notions that the horse has bolted,” Longo said in an address to the ASIC UTS AI Regulators Symposium on Tuesday.


“Government and regulators can – and must – have a hand in shaping how AI technology is designed and deployed. It needs to accord with the values and rights on which our social stability and individual liberties depend.”

The event brought together academics, industry experts, and government representatives to consider how to go from “the regulation we have” to “the regulation we need,” he said.

He called on regulators to keep up to date both in their policing of the technology and in making use of it themselves.

The message won’t fall on deaf ears at the ATO, which has made considerable use of the technology in the past.

For instance, last year it used its deep learning models to identify $295 million in underpaid superannuation guarantees, while also deploying natural language models to help flag key items in the notorious Panama Papers that revealed widespread debts from tax evaders.

“We keep abreast of emerging data and analytics technologies and techniques to identify those that may potentially provide value in administrating the tax, super and registry systems end-to-end,” ATO deputy commissioner of smarter data, Marek Rucinski, told The Australian Financial Review’s Government Services Summit last year.

“In the ATO, we would only use AI where it is legal and ethical to do so, and where humans are ultimately responsible for the decision-making that impacts clients,” Rucinski said.

Earlier on Tuesday, Longo appeared before the parliamentary Select Committee on Adopting Artificial Intelligence, to share the regulator’s vision to become a “leading digitally enabled and data-informed regulator by 2030.”

ASIC has launched a digital transformation program to help get there and will consult with international regulators to stay abreast of generative AI opportunities and threats.

“This is why we are extremely interested in the use and impact of AI technologies in the financial system, so much so that we have made it a key priority for ASIC,” he told the committee.

“We are reviewing the use of AI and advanced data analytics in a sample of entities in banking, credit, insurance, and financial advice, and testing how licensees are identifying and mitigating potential consumer harms.”

A lawyer by trade, Longo previously said his skill set lies outside of technology, but he has been among the loudest regulatory voices on the subject.

At the ASIC Annual Forum late last year, Longo said the technology “posed great challenges for regulators,” not least around personal data.

“There’s a whole lot of data about your physical movements, what you’re buying, where you are, and the technology somehow collects all this data … and is helping to target your consumer preferences,” he said, adding: “I find that pretty scary.”


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