"There will be interruptions; there will be problems."
That was the warning from the regulator that watches over the nation's banks, superannuation funds and insurers about how artificial intelligence could cause major disruptions to business, consumers and the wider economy.
Every year the Australian Prudential Regulation Authority (APRA) identifies the biggest risks that could cause havoc for financial stability.
While AI risk has been on its radar for a while, from next year, for the first time, the regulator intends to run "stress tests" about AI-driven risks.
That is, it will run hypothetical doomsday scenarios that could eventuate because of AI.
It is not a matter of if, but when, a disaster scenario could unfold, APRA chair John Londsale told journalists during a media briefing on Thursday.
Major institutions were "not where they needed to be" in preparing for the growing risks posed by AI, he said.
"And so, we're talking to entities about … have you got the systems in place to make sure that you can recover at speed and make sure that there's continuity of service provision to customers?"
The warnings come after Australia recently experienced its own AI-driven scare.
In June, an autonomous OpenAI agent accessed a non-public Australian Medicare statistics portal while researching health data.
