Governor Bullock says the RBA is exploring AI's impact on the economy

Australian Central Bank Governor Mitchelle Bullock has confirmed that the bank is exploring the impact of AI on the economy. She said they are examining the potential implications for inflation and employment during the 60th Shann Memorial Lecture in Perth.

Bullock urged policymakers to remain alert to all possible impacts as AI adoption increases. She acknowledged that technological change has continuously reshaped the labor market, noting that AI is no exception.

According to her, some roles may be changed or displaced altogether with new ones forming. 

RBA deploys AI and data tools to boost research

Governor Mitchelle Bullock outlined in a speech the steps being taken at the Central Bank to explore AI’s impact on the economy. The RBA has acquired an enterprise-grade GPU that will aid the development of AI-driven analytical tools. It has also adopted a hybrid model that utilizes secure cloud and on-premise data centers. She confirmed that about 450 employees are now actively coding using AI-assistant tools.

The Bank has adopted a pilot program called RBAPubChat, an internal chatbot that surfaces insights from nearly 20,000 analytical documents ranging from petabytes of data. The Governor revealed that they are conducting efficiency improvements in research and analytics, but not to make policy. 

“To be clear, we are not using AI to formulate or set monetary policy or any other policy.”

-Mitchelle Bullock, RBA Governor

RBA’s data holdings include more than 125,000 time series data, with 5,000 being updated daily, adding roughly 100,000 new data points daily. There are also around 7.5 petabytes of structured and unstructured data covering more than 200 years, including archival records. She said a digitization program exists to preserve and search these records to generate insights.  

Bullock highlighted several tools that help extract qualitative insights from quantitative indicators. She mentioned the RBA’s liaison program, which has logged over 22,000 bank conversations. She revealed that they use a secure natural processing language (NLP) model to extract sentiment related to signals, pricing, wages, and uncertainty.

Bullock says AI will reshape the payments and labor market 

According to Bullock, the liaison-based indicators can improve wage growth nowcasts versus a traditional Phillips curve. She revealed that their recent liaison-based survey showed firms have invested heavily in cybersecurity and cloud throughout the last five years and plan to continue spending alongside AI and automation in the next three years. 

The liaison survey revealed that many firms anticipate AI will first augment roles, potentially increasing numbers before easing down as adoption matures. She noted that demand will shift from lower to higher-skilled labor. 

The RBA also migrated its IT infrastructure to the cloud to enhance resilience in processing over 348 million domestic payments ($846 billion) and 1 million international payments ($20 billion) in the fiscal year 2024/2025. She noted an improvement with fast settlement service supporting a new payment platform for real-time trades.

This development follows the 2023 central bank digital currency pilot program with the DFCRC, which tested real asset transactions using the CBDC claim on the RBA.

Bullock also noted that the follow-up project, Acacia, is now in the build and test phase and is examining wholesale tokenized asset markets. The project examines multiple distributed ledger platforms and settlement assets such as stablecoins, bank deposit tokens, a pilot CBDC, and existing settlement accounts. 

Governor Bullock said the bank is strengthening risk governance with a new model and board of governance to balance innovation with resilience and financial stability amid technological changes.

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