As ASIC and the OAIC move from observation to enforcement, your firm needs a GRC framework that treats AI governance not as a compliance burden — but as the foundation for sustainable, trust-based financial services.
For the past three years, ASIC and the OAIC took an observation posture on AI in financial services — issuing guidance, publishing consultations, flagging concerns. That period is over. The Privacy Act amendments are law. The December 2026 deadline is fixed. And ASIC’s existing s912A obligations have always applied to automated tools — firms are only now realising how exposed they are.
The obligation is not new. The enforcement risk is. Firms that cannot demonstrate transparent, supervised, and explainable AI governance by December 2026 face civil penalty exposure, PI insurer scrutiny, and the kind of ASIC attention that no principal adviser wants.
The standard is not perfection — it is reasonableness. Section 912A of the Corporations Act requires you to take reasonable steps to ensure your systems do not malfunction or cause consumer harm. The test is not whether your AI is perfect. It is whether you can demonstrate that you understood it, governed it, and acted when it failed.
Our GRC framework is built on three pillars that address the full scope of your regulatory obligations — from the systems you run, to the clients you serve, to the data you hold.
Every AI use case has a named, accountable owner. Your ADM Register identifies every in-scope system, who is responsible for it, and how its outputs are supervised. The Board has formally endorsed your AI governance posture.
ASIC s912A · Corporations Act ss182–183Every ADM system affecting clients is disclosed in your Privacy Policy in “meaningful terms” — explaining the input, logic, and outcome of automated decisions. Clients have a documented right to request human review.
Privacy Act APP 1.7 · Mandatory Dec 2026Your data practices support — not undermine — your governance commitments. Data lineage is documented, ethical impact reviews are conducted before deployment, and data minimisation principles are applied across all AI systems.
Privacy Act APPs 3, 6, 11 · CPS 234Traditional risk matrices fail to capture the unique characteristics of AI systems — the opacity, the compounding effects, the silent degradation over time. Our AI Risk Assessment methodology addresses the specific failure modes that affect automated financial services tools.
We assess how agentic AI — systems that act independently — could compound operational risks or exploit client behavioural patterns in ways that breach your duty of care.
Synthetic test cases run through your models to detect proxy discrimination — changing only age, gender, or postcode to see if automated outcomes shift in ways that constitute unfair treatment.
Continuous monitoring protocols to detect when an AI model’s accuracy degrades over time — ensuring your “efficient, honest and fair” service standard remains consistent after deployment.
Structured vendor due diligence evaluating your AI supply chain — ensuring third-party tools meet the same governance standards as internally built systems, satisfying CPS 230 requirements.
AI multiplies whatever governance culture already exists. A firm with strong oversight processes gains leverage from AI. A firm with weak supervision creates faster, more expensive failures. Our risk methodology is designed to identify which category your firm is currently in — before ASIC does.
The 2026 compliance deadline is the most visible milestone — but the regulatory activity leading up to it has already begun. Here is what is happening, and when.
ASIC is actively reviewing whether trading algorithms, digital advice tools, and automated risk profiling systems contribute to unfair client treatment under s912A. Firms using these tools without documented governance are already exposed.
ASIC s912A · OngoingThe OAIC begins targeted compliance sweeps of publicly facing privacy policies — checking for ADM disclosure compliance. Firms without updated privacy policies that meet the “meaningful terms” standard will be identified and flagged.
Privacy Act APP 1.7 · OAIC enforcementThe first mandatory requirements of the updated Australian Government AI policy take effect, influencing industry best practice expectations across regulated sectors.
Australian AI Policy FrameworkThe mandatory ADM transparency obligations under APP 1.7 come into full effect. Every AFSL holder must have an updated Privacy Policy disclosing all in-scope AI systems. Civil penalty provisions apply.
Privacy Act APP 1.7 · Civil penalties applyThe governance principles underpinning every engagement.
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The December 2026 deadline is not the end of the story. The firms that build genuine AI governance now will have a sustainable competitive advantage — in client trust, regulatory relationships, and PI insurer standing — for years after.
Request a GRC Assessment →Liberate Consulting provides GRC strategy and training. For specific legal advice regarding your AFSL obligations, please consult qualified legal counsel.