AUSTRALIA Trends and Developments Contributed by: Charmian Holmes, Jaime Lumsden, Michele Levine and Jessica Smith, Hamilton Locke
and technical challenges, with major banks struggling to integrate with the system. More recently, innovative use cases and solu - tions have emerged and PSPs are now using the PayTo infrastructure for B2B transactions, including automating subscriptions, bill pay - ments, and even distribution of wages (which otherwise wouldn’t be able to readily access PayTo solutions). Blockchain applications Blockchain is seen by many as the infrastruc - ture of the future and with that comes a race to build out solutions. Many anticipate a migration of assets on-chain, referred to as asset tokeni - sation. As increasing numbers of assets are migrated to the blockchain, this is going to drive the need for strong user on and off ramps, easy to use interfaces and better integration between DeFI and TradFi. Stablecoins are likely to be a key driver in this ecosystem and the beginnings of a push for local stablecoins in the bigger economies outside of the United States, includ - ing Australia, can now be seen. Artificial intelligence (AI) AI is fast becoming the tool of choice when it comes to customer service, operational efficien - cies and risk mitigation. There has been a proliferation of different AI tools and integrations in financial and credit services. ASIC is well aware of this and released a first- of-its-kind report on AI at the end of last year, examining how Australian financial services and credit licensees are adopting and implementing AI solutions in their business and the significant governance gap that has occurred as a result.
In their report, ASIC highlighted a range of both accepted AI uses and emerging AI uses, includ - ing the following. Accepted AI uses: • Predicting and managing credit default risk collection strategies. • Optimising marketing communications. • Chatbots to answer simple questions. • Transaction monitoring. • Internal process efficiency, eg, business analytics, quality assurance, documentation indexing or triaging. • Actuarial models for risk, cost and demand modelling for insurance. Emerging AI uses: • Predicting probability of recovery customer defaults/arrears for customer vetting. • Generative AI drafting marketing copy. • Generative AI use by customer-facing staff. • Scam risk identification. • Financial hardship or vulnerability indicators. • Machine learning to enhance efficiency in the underwriting process. Whilst ASIC has acknowledged that there are governance gaps, the onus is on fintechs to con - sider whether the proposed use cases and the appropriateness of risk mitigants and controls to reflect the nature, use and risks associated with AI deployment. Australian consumer and busi - ness expectations are also shifting, with greater demand for personalised products and services which can be delivered more efficiently, using AI. Privacy reforms On 12 September 2024, the Privacy and Other Legislation Amendment Bill 2024 (Cth) (Privacy Reform Bill) was introduced to amend the Pri -
46
CHAMBERS.COM
Powered by FlippingBook