On 23 July 2025, the Australian Securities and Investments Commission (ASIC) Chair Joe Longo delivered a speech at the Australian Banking Association (ABA) Banking Conference in Sydney. The speech, titled “AI: A blueprint for better banking?”, explored how artificial intelligence could reshape Australia’s banking sector. Longo confirmed that ASIC will not impede customer-centric AI innovation but warned that “cutting-edge technology cannot leave your customers bleeding.” While the regulator does not plan to rush new AI-specific rules, ASIC emphasised that directors and licensees must already comply with technology-neutral obligations under the Australian Corporations Act 2001 (Cth). Joe Longo argued that trust in AI remains low in Australia, but that banks are uniquely positioned to rebuild consumer confidence by deploying AI ethically. He concluded by stating that ASIC would use its existing enforcement powers to address misconduct and ensure that AI adoption delivers real benefits for customers.
ASIC’s Position on AI Regulation
ASIC’s current stance is that Australia’s technology-neutral legislative framework already imposes obligations on directors and financial services providers using AI. New regulation may eventually be necessary, but Longo stressed that creating fragmented, overly specific rules risks greater complexity and compliance burdens. Until then, ASIC will test the limits of its current powers, adopting what Longo called a “bolder and more imaginative” enforcement approach.
Consumer Trust and Banking Opportunities
Citing RepTrak and KPMG data, Longo stated that while 50% of Australians use AI tools, only 36% trust them. Australians report lower training and confidence in AI than international peers. ASIC views this distrust as an opportunity for banks to lead by example. With advanced systems, data science teams, and daily customer touchpoints, banks are well-positioned to demonstrate how AI can deliver secure, transparent, and beneficial outcomes.
AI in Practice: Examples from Australian Banks
Joe Longo pointed to industry pilots as evidence of AI’s potential in banking:
- Westpac is using AI to assist scam and fraud detection teams.
- NAB is deploying AI to identify systemic issues in customer complaints.
- CBA is trialling AI bots to counter scam callers, a project first conceived at Macquarie University.
These initiatives, he argued, show how AI can protect consumers and reinforce trust.
Governance, Enforcement, and Consumer Protection
ASIC’s Report 798: Beware the Gap found deficiencies in governance among AFS and credit licensees using AI. Longo warned that entities risk enforcement action if AI harms consumers or breaches existing obligations. He also noted that ASIC’s Report 785: Better Banking for Indigenous Consumers revealed systemic fee harms, with millions refunded to low-income customers. He challenged banks to use AI proactively to prevent such harms rather than waiting for regulatory intervention.
Legal Analysis and Implications and Compliances
The speech made it clear that directors’ duties under the Australian Corporations Act 2001 (Cth) extend to oversight of AI systems. Boards must ensure that AI deployment aligns with fiduciary and statutory obligations, including managing risks of unfair contracts, predatory lending, and systemic harm. While ASIC has avoided proposing new AI legislation, its message was clear: customer-centric deployment of AI will be supported, but irresponsible use may trigger enforcement. This stance aligns with international regulatory approaches that favour principle-based obligations over rigid AI codes.
(Source: https://www.asic.gov.au/about-asic/news-centre/speeches/ai-a-blueprint-for-better-banking/)
