Generative AI Set to Transform Australian Finance with Doubling Adoption and $49 Billion Economic Boost

AI Use in Australian Finance Expected to Double Within Three Years

The adoption of generative AI in Australia's finance sector is projected to double over the next three years, bringing notable changes, especially in mortgage processing. This growth is backed by new research commissioned by the Australian Finance Industry Association (AFIA) and conducted by King & Wood Mallesons and Sapere.

Generative AI promises significant productivity improvements, particularly by boosting employee efficiency and automating repetitive tasks. Businesses investing in this technology are focused on enhancing customer experiences by speeding up service delivery and simplifying interactions.

Improving Customer Experience and Process Efficiency

One key application highlighted is the streamlining of mortgage applications. Generative AI can guide customers through varied and sometimes inconsistent digital processes, reducing friction and confusion. For example, if customers face different procedures for tasks like mortgage initiation and address changes, AI can proactively identify and help navigate these steps.

Beyond mortgages, AI is also being used to prevent scams. The Commonwealth Bank of Australia (CBA) reports a 50% reduction in customer scam losses thanks to AI-driven security. Other benefits include a 30% drop in customer-reported frauds and a 40% decrease in call centre wait times, partly due to AI-powered app messaging.

Economic Impact and Financial Benefits

The financial sector stands to gain substantially from AI adoption. Economic modelling shows that, under a medium adoption scenario, generative AI could increase the finance industry's revenue by a cumulative $15.9 billion from 2025 to 2035. Additionally, AI's influence is expected to add $48.9 billion to Australia's GDP over the same period, equating to an extra $690 per person annually by 2035.

AFIA's CEO Diane Tate emphasises that AI will drive efficiency, improve customer experiences, and help Australian financial firms compete globally. Customers increasingly expect quick, clear, and simple financial services, and AI is set to meet these demands effectively.

Current Adoption Challenges

Despite its benefits, AI uptake in the Australian finance industry has been slow. Only about one-third of surveyed organisations have integrated generative AI into their operations. This cautious approach is due to concerns around accuracy, transparency, privacy, and dependence on a few technology providers.

Moreover, the lack of a clear regulatory framework is holding some businesses back. AFIA calls for balanced oversight that protects consumers without stifling innovation.

How Brokers Are Using AI

Brokers are increasingly incorporating AI tools to tackle common challenges. Recent launches include Cynario, an AI platform assisting brokers with lender mortgage policies, and HAILO by LoanOptions.ai, designed to accelerate mortgage applications for brokers and clients.

Other broker-developed tools like Quickli and BrokerEngine streamline core tasks, while non-bank lender Bluestone Home Loans uses AI to detect fraud and speed up applications. Bluestone’s chief commercial officer, Tony MacRae, stresses that AI supplements rather than replaces brokers, maintaining the personal support clients value during major financial decisions like home loans.

Conclusion

Generative AI is set to transform many aspects of finance in Australia, improving efficiency, customer experience, and security, while contributing to economic growth. However, cautious adoption and thoughtful regulation remain key to unlocking its full potential.

Finance professionals interested in expanding their AI knowledge can explore relevant courses and resources at Complete AI Training.