As we continue to explore and leverage technology, including AI tools, it’s crucial to balance innovation with responsibility. You won’t find all the answers here, but we hope to offer some useful thoughts to help you navigate key considerations. Our aim is to provide practical guidance that helps advisers adopt new technologies while safeguarding their clients and themselves.
One of the key considerations when using AI is data security and privacy. Whether you’re adopting new software, using AI for automation, or outsourcing services, you have a responsibility to protect client data and operate within evolving regulatory standards. Here are some foundational steps:
1. Due Diligence on Tools
Before using any software or AI tool, ensure you’ve conducted your own investigations to satisfy yourself, your clients, your licensee, and relevant regulations. Understand how these tools handle data and confirm that they meet Australian privacy laws and industry best practices.
2. Client Consent is Key
Using AI tools, especially those involving client data (e.g., transcribing or summarising meetings), extends the need for client acknowledgment. This aligns with existing practices of notifying clients when their data is handled by third-party providers or outsourced services.
As standards evolve, it’s essential to keep your clients informed and seek their consent for AI-driven processes. Transparency fosters trust and ensures compliance.
3. Practical Steps for Advisers
Here are two key areas to focus on:
a. Call Consent Wording:
When recording conversations, it’s not enough to simply notify clients about the recording. If you’re using AI tools for tasks like transcription or summarisation, this should also be disclosed.
Here’s an example of what you could say:
"Before we start, I’d like to let you know that this meeting will be recorded to assist with note-taking and to ensure we accurately capture our discussion. We may also use AI tools to summarise the meeting. If you have any concerns or would prefer not to proceed, please let me know. For more information, you can review our privacy policy on our website."
b. Privacy Policy Wording for Your Website:
Your privacy policy should reflect your use of AI and other tools or services.
Here’s a sample:
"In the operational aspects of managing your financial needs, we use a variety of software systems and tools to support our processes. This includes artificial intelligence tools for tasks such as automating workflows, summarising notes, and assisting with communication. We conduct due diligence on all systems to ensure your personal information is protected. In some cases, we may also engage third-party service providers, both onshore and offshore, to assist with administrative tasks. These providers are subject to strict data protection protocols. For more information, please contact us or review our privacy policy in detail."
4. Staying Ahead of Evolving Standards
AI and technology use in financial advice is progressing rapidly. It’s vital to stay informed about developing standards and adjust your practices accordingly. Regularly review your privacy statements, client communication, and consent procedures to ensure they remain relevant and compliant.
The Office of the Australian Information Commissioner (OAIC) provides helpful guidance on the use of AI and privacy. Their resources offer a clear framework for ensuring compliance with the Privacy Act when integrating AI into your operations. As the OAIC notes:
“Organisations must ensure that their use of AI complies with the Privacy Act by being transparent about how AI is used and obtaining consent where required.”
This guidance serves as a valuable reference point, particularly for understanding privacy-related obligations when using AI. While it’s not the sole resource, it provides a strong foundation to build from as you navigate the evolving landscape of technology and data protection.
Link to the guidance notes: https://www.oaic.gov.au/privacy/privacy-guidance-for-organisations-and-government-agencies/guidance-on-privacy-and-the-use-of-commercially-available-ai-products
Final Thoughts
Adopting AI tools can enhance your practice, but with this comes the responsibility to protect your clients’ data and maintain transparency. By implementing clear communication and robust policies, you can embrace these innovations confidently.
The Risk Hub Team