The Australian Prudential Regulation Authority (APRA) has instructed major banks and lenders to help protect the cyber and financial ecosystem by sharing cyber knowledge and tips with smaller lenders.
Following restrictions placed on foreign frontier AI models like Mythos due to bans overseas, APRA has asked major lenders to share tools and insights with smaller rivals in a letter sent to all banks on April 30.
APRA executive board member Therese McCarthy Hockey warned that Australia was “entering a dangerous period in the AI revolution,” adding that it was confident that “frontier AI presents a paradigm shift.
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“For Australian financial institutions, frontier AI is not just a cyber-risk issue. It's a third-party risk, a concentration risk and a sovereign access risk. A critical business process, control or cyber-defence capability that depends on a single offshore frontier AI model may be disrupted not only by an outage or cyber incident but by a regulatory decision made overseas,” she added
In the letter, APRA said boards did not have the literacy needed to combat AI risks and oversight, and AI governance was not keeping up with adoption.
The Commonwealth Bank of Australia (CBA), which has already invested heavily in AI and has ties to both OpenAI and Anthropic, said it would share knowledge with smaller banks and lenders.
“Improving and maintaining Australia’s cybersecurity requires a whole-of-ecosystem approach and collaboration between government, industry, and the community,” said Nicola Nicol, CBA chief security officer.
“This involves sharing intelligence, knowledge and insights with government and industry partners on emerging technologies, such as frontier models, to help lift cyber capability across the ecosystem.”
APRA also noted that Australian banks rely heavily on the third-party digital networks of overseas organisations, meaning that if international regulatory policy changes, it could lead to vulnerabilities and other risks here in Australia.
The warning comes as a Five Eyes intelligence assessment noted that commercial enterprises face increased risk from cyber attacks as AI makes cyber crime more accessible for criminals.
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Daniel Croft
Born in the heart of Western Sydney, Daniel Croft is a passionate journalist with an understanding for and experience writing in the technology space. Having studied at Macquarie University, he joined Momentum Media in 2022, writing across a number of publications including Australian Aviation, Cyber Security Connect and Defence Connect. Outside of writing, Daniel has a keen interest in music, and spends his time playing in bands around Sydney.