ASIC chairman Greg Medcraft says financial services providers will need to be totally transparent about the way their systems operate as technology takes an increasingly central role.
Mr Medcraft says there are huge opportunities from the nascent use of artificial intelligence - and in the algorithms that provide so-called "robo-advice" in the fintech sector - but also greater risks.
He flagged fraud, privacy breaches and insufficient awareness of risk as areas of concern for the corporate watchdog.
"As we see the potential of automated financial services, and AI playing a role, we need to look to the algorithms behind these services," Mr Greg Medcraft said at the Australian Securities and Investment Commission's annual forum in Sydney on Monday.
"These algorithms will need to be transparent so their decisions can be challenged, and not just be considered opaque 'black boxes'."
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