From next season onwards, players found guilty of 'successful deception of a match official' during an independent post-match review will face a two-game ban as the Football Association looks to stamp diving out of the game.
However, Guardiola believes that a more pressing issue is the need for instant video technology to help referees with difficult decisions.
"I think diving is not the most important thing to improve. There are many other cases we can improve," the Spaniard told reporters.
"Sooner or later that is going to happen, the technology [that] will help the referees to be more fair about what happens in the game, to make less mistakes because there are a lot of mistakes.
"It is because football today is quicker and faster than it was before - and they (officials) are not able to arrive in the right moments and sometimes the decision is wrong."
Man City will end their season away to Watford on Sunday knowing that victory will clinch third place in the Premier League table.