Key Obligations and Requirements:

Background Information

Artificial Intelligence (AI) is the simulation of human intelligence by machines and technology, enabling them to perform tasks that typically require human cognition.

Generative AI are AI Systems that generate new content, such as images, text, software code, or music using algorithms and machine-learning technology. These AI systems are becoming more and more utilised by businesses to maximise efficiency and effectiveness in resource production and review.

Current Legislative Expectations

In the financial service industry, there are several legislation obligations that must be considered before the implementation of AI. This is particularly relevant to privacy obligations where client personal information must be kept away from AI systems, because of the risk of data breaches.

The introduction of Privacy and Other Legislation Amendment Act 2024 the use of Automated-Decision-Making (ADM) AI Systems requires clear, written, and informed consent from the client prior to the use of these systems. ADM AI Systems may be used in areas like financial risk assessment, client suitability, and personalised recommendations. For example, these systems can be used to assess a client’s suitability based on factors like income, spending patterns, and credit history. These systems automatically determine whether the applicant qualifies for a product, service, or whether it is applicable to their risk appetite.

Utilisation of AI in the Workplace:

Reasons for Utilisation

The benefits of utilising AI can include:

• Task Automation
• Data Analysis
• Personalised Customer Interaction and Support
• Content Creation
• Increased Productivity
• Enhanced Decision-Making, and
• Reduction in Workload.

Recommended Guidelines

AI can also pose risks to operations and clients, especially around client privacy and intellectual property. Therefore, protecting the confidentiality, integrity, and availability of all business and client information must be a priority.

The following flowchart provides a summary of the guidelines that should be considered to prevent further exposure to risks:

Want to Know More?

At the beginning of the 25/26 Financial Year, our AI Training Module will be available for enrolment on the GRC Essentials Training Platform.

We also can assist with an AI Policy.

If you would like us to provide a presentation on the use of AI, or have access to the AI Policy, please contact us at support@grcessentials.com.au