Australian financial institutions are moving faster on artificial intelligence than their underlying data can support, according to new research from Experian, which found a stark gap between AI ambition and data readiness across the lending sector.
The findings, drawn from Experian's global Connected Intelligence: Scaling AI with Trusted Data and Decisioning report, show 72% of Australian financial institutions surveyed are already using agentic AI to assist underwriters with recommendations or decision support, with 75% citing faster or real-time decision cycles as a core benefit. Yet only 3% described their data as fully AI-ready, while 67% said their data was either not ready or only partially ready to support AI-driven decisioning.
In a separate measure, 72% described their organisation's use of AI across fraud and credit risk underwriting as emerging or early-stage, with just 11% saying it's widely implemented.
Fragmented systems are the biggest sticking point. Respondents identified fragmented data that doesn't provide a unified customer view (45%), poor data quality (42%), and a lack of trust in AI outputs (31%) as the leading barriers to scaling AI across decisioning.
With Privacy Act reforms, the new Scams Prevention Framework and the Consumer Data Right all reshaping how institutions handle data, the research found 69% of respondents agree data quality and governance issues are a common reason AI implementations fail, while 84% said transparency of analytics and insights was highly valuable to improving decisions.
That caution extends to how much autonomy lenders are willing to hand AI: only 51% said they're comfortable letting AI make decisions without human review for low-risk cases, and just 2% were comfortable with fully autonomous decisioning at scale across most use cases.
Mathew Demetriou (pictured), Experian Australia and New Zealand managing director of software solutions, said the technology was already embedded in workflows, but trust and governance remained the harder problem to solve.
"What we're seeing with Australian lenders is that AI is already in underwriting workflows with the research showing 72% are using agentic AI for decision support, but the harder question being asked is how to trust and govern it at scale, especially as regulators sharpen their focus on how data is used. The foundations underneath AI still need to catch up," Demetriou said.
Despite the gaps, demand for AI-enabled tools hasn't cooled. More than nine in 10 respondents (92%) said they would pilot, test, or adopt a vendor capable of meeting their data, software, and AI needs for fraud and credit risk underwriting.
Demetriou said closing the data readiness gap would define the sector's next phase.
"Without trusted and well-governed data, there is a risk that organisations may struggle to operationalise AI at scale," he said.
That appetite mirrors sentiment on the broker side of the industry too — a separate Connective survey found 86% of brokers believe AI will be essential or helpful to running their business within the next two years, with roughly half saying it will be critical to staying competitive.
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