THE WASHINGTON POST: Calls for greater regulation of Australian superfunds

Australia’s regulator said the nation’s world-leading pension system needs to spend more money on cyber protection as an aging population becomes increasingly vulnerable to AI-induced crime.

Australian Prudential Regulation Authority Deputy Chair David Bradbury, who is just six weeks into the role, called for more sharing of resources between pension funds, known locally as superannuation, or super, in addition to the higher spending.

“It’s absolutely clear that more money is going to have to be invested,” Bradbury said in Sydney on Thursday at the Financial Services Council Retirement Summit. Just how much, was less clear, he added.

The remarks follow a slew of cyberattacks that have hit the region in recent weeks, spanning Australia, Japan and South Korea. OpenAI has apologized for its AI models breaching Australian government websites, while one of India’s largest banks has launched a probe after customer records were exposed.

Last year some of Australia’s largest pension funds were targeted as part of cyber attacks where passwords and investments were stolen.

Bradbury outlined a scenario that worries him where an attacker could “strike and to do a lot of damage very quickly” by emptying out pension accounts, a “potentially catastrophic risk.” Australia’s pensions industry sits at around A$4.8 trillion ($3.4 trillion).

“We really need to make sure that we are dedicating the resources into the places where the risk is greatest, both from a regulatory and enforcement of the supervisory perspective, but also in terms of where superannuation trustees are dedicating their resources,” he said.

“The risks that keep me awake at night are those that have the potential to threaten the financial stability of our system, or those that can lead to catastrophic losses for members,” Bradbury said.

Bradbury said pensions could look to the banking sector for guidance on spending.

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