The ‘shadow AI risk’ haunting super funds

Investment Magazine

Super funds are coming under increasing pressure from APRA and ASIC to demonstrate how they’re using and thinking about  AI. But Paul Newfield, director of sector research at Frontier Advisors, said the regulators are less interested in security protocols and tools than they are in how AI is actually being used in decision-making. “Because I suspect that, regardless of the protocols that exist today, in most funds the shadow AI risk is larger than the AI program,” Newfield told the Investment Magazine Fiduciary Investors Symposium.

“Thirty years ago, when you asked someone to do a piece of analysis, they’d get a whole bunch of data, they’d run a spreadsheet and do calculations and come to you with a report and you knew where all of that came from.  “When you get a report today, you have no idea whether AI has contributed to it, whether it’s had a bias in a particular direction, whether they’ve constructed a model to promote the original thesis that you put forward.”  What’s helpful for that problem is to understand the biases that are baked into AI, according to Anthea Roberts, founder and CEO of AI firm Dragonfly Thinking. 

The rest of this article can be found at investmentmagazine.com.au.