August 31, 2026
AI in Financial Services: The Case Against (Part II)
In Part II of this two-part series, we explore the risks and safe adoption of AI tools in Australian financial services businesses.
Financial services organisations are integrating AI faster than regulators had anticipated.
AI adoption among financial services firms rose from 71% to 91% between 2024 and 2025, and new commercial use cases continue to emerge as technology advances by the week. Embracing this opportunity comes with an equal responsibility: preventing consumer harm and the legal exposure that follows.
In Part I of a two-part AI series, we explore the opportunities and benefits of AI for financial services businesses.
When it’s designed, tested and deployed appropriately, an AI-driven workflow can be as trustworthy and unremarkable as mobile banking. Here are some of the ways financial services businesses are already benefiting from AI tools:
AI chatbots can help customers understand non-complex financial advice while building trust with the firm over time.
Manual processes, however experienced the team, remain error-prone, unscalable and challenging to monitor or audit. AI-enabled processes, paired with appropriate human oversight, have the potential to deliver stronger risk management outcomes.
AI has limits, particularly around high judgement-based activities like complex financial advice and structuring, where it remains unreliable. Professional human judgment here is still required.
AI tools can support Australian financial institutions with identity document parsing and biometric checks, helping confirm true identity and facilitate client onboarding. It can also assist with activities such as dynamic risk scoring and applicant screening under controlled human supervision.
When rigorous security controls are in place, AI can automate regular reporting, assisting the teams who check, refine and approve those reports.
AI can sharpen how financial services firms target their marketing and customise service offerings. It can assist with appropriate target marketing initiatives by analysing large transactional and behavioral datasets to deliver hyper-personalised offers that (when done well) adhere to APRA and ASIC regulatory frameworks.
Compliance testing and customising to a client's obligations must be coordinated and well documented to keep the process independently verifiable. Done properly, AI can help produce an optimised, end-to-end process that has the potential to satisfy regulatory requirements.
However, professional advisers still play a critical role in helping clients manage risk through tech-led transformation. That support depends on deep knowledge of relevant laws, regulatory requirements and experience across financial products, services and operations.
This means financial services advisers and stakeholders also need a genuine understanding of how the new technology functions, and where its limitations lie.
When implementing artificial intelligence processes, the objective, working alongside internal and external advisers and experts, is to provide senior management and the board confidence that AI outputs are correct, complete and holistically aligned with regulatory and legal requirements.
Talk to PMC Legal to ensure your AI adoption strategy is adequately documented, non-misleading, legally compliant and properly monitored with human oversight.
We’ll explore the risks and complexities of AI adoption in financial services businesses in Part II.
