The APRA AI risk warning has placed banks, insurers, and superannuation trustees on alert as Australia’s financial regulator calls for a significant uplift in how artificial intelligence is governed across the sector.

The Australian Prudential Regulation Authority has stated that current governance, risk management, and operational resilience practices are not keeping pace with the rapid adoption of AI.

In a letter to regulated entities, APRA said the APRA AI risk warning follows a targeted supervisory review conducted late last year across major financial institutions. The review assessed how AI is being deployed and governed across the industry and found widening gaps between technol...