Australia’s financial regulator has warned that rapid advances in artificial intelligence are creating new cybersecurity risks that banks are not fully prepared to manage. The Australian Prudential Regulation Authority said in recent correspondence to lenders that existing information security frameworks are struggling to keep up with the speed and sophistication of AI-driven threats. Officials noted that while AI offers significant opportunities for efficiency and innovation, it also increases the probability, speed, and scale of cyberattacks, particularly through advanced models capable of identifying system vulnerabilities. The regulator raised concerns that some financial institutions rely too heavily on vendor assurances rather than independently assessing risks, while many boards still lack sufficient technical understanding to properly oversee AI systems. APRA emphasized that banks must urgently improve monitoring, governance, and control mechanisms to close the gap between technological capability and security readiness. Although no new regulations have been introduced yet, authorities are urging a significant uplift in cyber resilience as AI becomes more deeply embedded in financial operations.
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https://www.retailbankerinternational.com/news/australian-ai-outpacing-bank-cyber-defenses
