Australia calls for stronger AI risk controls at financial firms

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April 30 : Australia's prudential watchdog warned on Thursday that many financial firms still lack the technical knowledge needed to effectively challenge AI-related risks, while calling for an overhaul in AI-related risk procedures.

In a letter to the financial industry, the Australian Prudential Regulation Authority (APRA) highlighted findings from last year's supervisory review, indicating that information security practices are struggling to keep up with the pace of change.

The regulator specifically flagged frontier artificial intelligence models, such as Anthropic's Claude Mythos, as tools that could enhance the discovery of vulnerabilities by bad actors, thereby increasing the "probability, speed and scale of cyber attacks."

APRA is currently finalising its forward plan with regards to the supervision of AI risks, it said in a statement.

"APRA will continue and monitor the use of AI to assess potential prudential risks and consider whether further APRA policy action may be needed," the regulator said.

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