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Rather than a negative disruptor, there is opportunity for AI to deepen consumer relationships.
“AI is both a catalyst for a new era in customer-centric banking – and a reminder that customer-centric is exactly what banking ought to be about,” said Longo.
For tech to be implemented in any setting effectively, there needs to be trust.
Longo noted that this is a real issue for AI adoption in Australia, as reports have shown a decline in consumer trust towards AI. Half of Australia uses AI, but just over a third (36 per cent) trust it.
A KPMG study referenced found that Australians are less trusting and positive about AI than most countries, with 78 per cent concerned about negative outcomes from AI.
This stems from a lack of understanding, with 60 per cent of respondents reporting low knowledge of AI.
Where organisations, including banks, are getting it wrong is implementing these systems without transparency.
KPMG Australia’s chief digital officer John Munnelly said the rapid development of AI is being done without adequate transparency, accountability, and ethical oversight, “which are essential ingredients for trust.”
Despite this, 83 per cent said they would be more willing to trust AI systems when assurances are in place, including AI standards, responsible AI governance practices, and monitoring system accuracy.
Longo said that AI has the potential to help lift productivity issues across the country if this trust barrier is overcome.
He said banks are at the forefront of this revolution. Often times the trailblazers, lenders have been using sophisticated systems for years and believe the trust factor can be overcome if they “get AI right.”
Mentioned were what some of the majors are leveraging AI to achieve:
- Westpac is piloting AI to assist fraud detection, with live transcripts and scam alerts.
- NAB uses AI to identify systemic issues in customer complaints.
- CBA deploys AI-powered ‘bots’ with Australian accents to waste scammers’ time, protecting real customers.
These innovations demonstrate AI’s potential to solve real customer problems, but trust must be earned through responsible implementation.
Where does regulation fit in?
Regulation of AI was also discussed. As it is the new frontier of tech, many are quick to call for more oversight from regulators to protect businesses and consumers.
However, Longo provided his opinion on the matter: “My position – and ASIC’s – is that we should not rush into more AI regulation.”
Trying to avoid convoluted compliance was a key reason behind this. Longo also said that laws that regulate tech extend to AI, so it is unnecessary to introduce further reforms.
However, he did note that while regulation is not a priority now, as AI becomes more widespread and sophisticated, it could be a reality in the future.
“We have yet to create the regulatory architecture, language, or strategy that will enable us to regulate confidently and in real time a group of technologies that is evolving as rapidly as we’re seeing,” Longo said.
“In the meantime, regulators will need to be bolder and more imaginative about how we use our existing powers… Ultimately, we don’t want regulation to have a chilling effect on AI innovation and the potential benefits that it would have for all of us.”
ASIC will continue to monitor the effects of AI, but believes innovation in the space is a net positive for consumers.
The view of the regulator is that AI creates an opportunity to promote customer-centric banking, as long as it is done properly.
“But, don’t be complacent and don’t forget – the customer must be at the centre of everything that you do – and ASIC will be watching,” concluded Longo.
[Related: The ‘trust deficit’ that’s hurting the industry]
