APRA’s AI guidance: what it means for financial services and how Plain English Foundation can help
APRA’s recent letter on artificial intelligence sends a clear message: AI is no longer an emerging issue. It is now a governance, risk and resilience issue that boards and executives must actively manage.
APRA found that AI adoption is accelerating across banks, insurers and superannuation funds, but governance, risk management and assurance practices are not keeping pace. It expects a significant uplift in how organisations oversee and manage AI-related risks.
For financial services organisations, the challenge is not whether to use AI. The challenge is how to use it safely, responsibly and in line with existing prudential obligations. APRA has highlighted concerns about board capability, cyber security, third-party dependencies, operational resilience and oversight of AI systems.
Five actions financial services organisations should take
- Strengthen board capability. Build AI literacy across directors and senior leaders so they can challenge decisions, understand risks and provide effective oversight.
- Create a formal AI governance framework. Define roles, responsibilities, approval processes and reporting lines for AI systems and use cases.
- Assess AI risks against existing obligations. Review operational risk, cyber security, privacy and information security controls to ensure they address AI-related risks.
- Strengthen third-party oversight. Understand where AI capabilities come from, monitor vendor risk and avoid over-reliance on a single provider.
- Build organisation-wide capability. Train leaders, risk teams and employees to use AI responsibly and understand their obligations when using AI tools.
AI offers significant opportunities for productivity, efficiency and customer service. However, organisations that fail to govern AI effectively may expose themselves to operational, regulatory and reputational risk.
How Plain English Foundation can help
Plain English Foundation helps organisations turn expectations into practical action. We work with boards, executives, risk teams and business leaders to develop AI governance frameworks, policies, procedures and user guidelines that people can understand and follow. We translate complex regulatory and technical requirements into clear, practical documents. We also help build organisational capability through training and communication so staff know how to use AI safely, responsibly and consistently. This helps strengthen governance, risk management, board oversight and operational resilience while supporting confident adoption of AI across the organisation.
Want to find out more? Contact us today to see how we can help your organisation turn APRA’s AI expectations into practical, plain English action.
