TLDR: The Australian Finance Industry Association (AFIA) is urging a ‘balanced and light-touch’ approach to AI regulation, emphasizing that overly strict policies could impede the substantial economic benefits AI offers, projecting up to $60 billion in GDP growth by 2035 from generative AI adoption in the finance sector.
The Australian Finance Industry Association (AFIA), the leading body for Australia’s finance sector, has called for a ‘balanced and light-touch’ regulatory framework for artificial intelligence (AI). This stance, articulated in a submission to Treasury’s Economic Reform Roundtable, underscores concerns that overly restrictive regulations could stifle the significant economic advantages AI is poised to deliver to the finance industry and the broader Australian economy. AFIA projects that the adoption of generative AI within the finance sector alone could contribute up to $60 billion to Australia’s GDP by 2035, even without structural reforms.
AFIA’s submission highlights the potential for AI technologies to drive economic growth, foster innovation, and enhance efficiency within Australia’s finance sector. The association cautions against ‘sweeping’ legislative regulation, arguing that such an approach could prematurely curtail this potential. Instead, AFIA advocates for effective AI strategies, robust risk assessments, and transparent reporting systems within corporate governance to ensure the safe and responsible deployment of AI. They suggest that government intervention should be targeted, addressing specific risks and existing gaps rather than imposing broad regulations that might hinder innovation and investment.
Diane Tate, CEO of AFIA, emphasized the transformative power of AI for the Australian finance industry, stating, ‘AI has the power to significantly enhance the Australian finance industry, driving efficiency, better experiences for customers and giving local finance firms a competitive edge globally.’ She further warned that ‘heavy-handed or premature regulation will stifle efficiency, deter investment, put a handbrake on growth and productivity, and undermine our global competitiveness.’ AFIA is encouraging collaboration between government, regulators, and industry to co-develop practical and adaptive frameworks that support responsible AI use while maximizing economic and operational benefits.
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The association expressed encouragement regarding recent comments from the Treasurer, who indicated the government’s focus on AI’s capabilities and opportunities, not solely on guardrails. AFIA also welcomed Assistant Treasurer Andrew Leigh’s commitment to applying existing laws and making technologically neutral amendments where current legislation falls short. The finance industry is already highly regulated, with many potential AI uses covered by existing consumer protection, privacy, and anti-discrimination laws. AFIA’s position is that AI regulation should primarily address gaps in these existing frameworks, with sector-specific guidance being the most effective approach for safe and responsible AI implementation.
