ASIC, APRA Urge Financial Firms to Act on Frontier AI Risks

The Australian Securities and Investments Commission (ASIC), which oversees market conduct, and the Australian Prudential Regulation Authority (APRA), the prudential supervisor, are pressing financial firms to treat frontier AI as a system-wide resilience issue. APRA supervises institutions holding about A$9.8 trillion in assets. The regulators say advanced models are increasing the speed, scale and sophistication of cyber threats while amplifying technology, operational and third-party concentration risks across an interconnected financial system.

On Aug. 27, ASIC and APRA issued a joint warning and an information paper calling on boards and executives to convert awareness into tested response and recovery plans. The agencies held nine roundtables in June and July with more than 600 participants, supported by the Australian Signals Directorate and joined by the Reserve Bank of Australia, Treasury and the Australian Competition and Consumer Commission. APRA had called for a step-change in AI risk management on April 30, followed by ASIC’s cyber-resilience warning on May 8.