PubChat at the Central Bank: RBA Rolls out Chatbot to Assist With Economic Analysis

In-house chatbot “PubChat” will scan 20,000+ documents, track sentiment, detect price pressures, and complement its 125,000 time series datasets.

Governor of the Reserve Bank of Australia (RBA) Michele Bullock speaks to the media during a press conference in Sydney, Australia, on Feb. 6, 2024. AAP Image/Bianca De Marchi

The Reserve Bank of Australia (RBA) is rolling out new artificial intelligence tools aimed at improving its economic analysis.

Governor Michele Bullock, delivering the Shann Memorial Lecture in Perth on Sept. 3, stressed that while AI would not be making monetary policy decisions, it would help staff process information faster.

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

“Instead, we are looking to leverage it to improve efficiency and amplify the impact of staff efforts in research and analysis.”

What Will the Chatbot Do?

At the heart of the bank’s new approach is an in-house chatbot known as RBA PubChat, which Bullock described as more than a simple search engine.

Drawing on nearly 20,000 internal and external documents, PubChat allows staff to review decades of research, and identify emerging themes.

The chatbot will help track business sentiment, detect early signs of price pressures, and compare current trends against historical data. Bullock explained that the technology is designed to complement, not replace, the RBA’s traditional 125,000 time series statistics.

“This tool does not replace expert human judgment, rather it enhances it,” she said.

Bullock outlined how AI-driven text analytics are being combined with structured statistics to create a “third lens” for monitoring the economy in real time.

For example, the RBA has built a database of more than 22,000 conversations with businesses that will help analysts look through data more effectively.

Preparing for AI’s Wider Impact

Bullock also used her lecture to highlight the broader economic consequences of AI, warning that governments would need to prepare for disruptions in the labour market.

“Technological change has always reshaped the labour market, and AI is no exception,” she said. “While many experts anticipate a net increase in jobs, it is likely to be more nuanced: some roles will be redefined, others might be displaced and entirely new ones will be created.”

She said governments would likely have to step in with retraining and education programs to support those affected.

“As AI continues to reshape industries and economies, it is not just the tools and processes that are evolving, it is the very nature of work,” she added.

The Reserve Bank’s AI push comes as the Coalition’s Robodebt scheme returns to headlines.

That program replaced human oversight with an algorithm averaging annual tax data into fortnightly figures, generating inflated or false debts.

The scandal, with a $475 million settlement, comes amid Bullock’s warning.

Scepticism At Fully Embracing AI

Financial firms have already adopted AI for risk modelling and client services, with mixed results in public trust.

A recent Wealthtender survey of 500 Americans with household incomes above $100,000 found that 64 percent were comfortable with AI generating personal financial plans, while 77 percent welcomed AI monitoring accounts for suspicious activity.

Yet only 45 percent trusted AI to make investment decisions without human oversight.

Another survey by Northwestern Mutual in May showed similar scepticism.

More than half of respondents said they trust human advisers over AI tools when it comes to retirement planning, savings strategies, and financial tips. Even among younger cohorts, 54 percent of Gen Z and millennials still preferred a human adviser.

Interest Rates Still in the Spotlight

While AI was the focus of Bullock’s prepared remarks, questions quickly turned back to interest rates. Australia’s cash rate is currently 3.6 percent, with the next decision due on Sept. 30.

Bullock noted that household spending was stronger than expected in the June quarter, reflecting rising real disposable incomes and higher wealth from rising housing prices.

“Normally, under those circumstances, you would expect to see consumption starting to rise … and that’s welcome,” she said.

But she added a note of caution. “It does mean that it’s possible that if it keeps going, then there may not be many interest rate declines left to come.”

As per latest ABS data Australia’s economy grew 0.6 percent in the June quarter and 1.8 percent over the year.