ASIC the "agile regulator" expects more as it steps up on regtech
It is critical that the corporate regulator expedites regtech innovation for itself as much as everyone else, says its deputy chair Dan Crennan who also acknowledged that the status quo on regulation is no longer an option.
Crennan was speaking at the second series of ASIC's regtech event in Sydney on Thursday.
The regtrech series by ASIC is aimed at helping the corporate regulator source ideas and possible use cases for its compliance agenda.
"Speaking on behalf of the commissioners, we want to position ASIC as a strategic and agile regulator," Crenann said.
Echoing earlier views made at the first event by Commissioner Cathie Armour, Crennan added that the regulatory was here to "listen, learn and keep an open mind".
By this, he means that it too needs to find the right balance between, protecting consumers; ensuring markets remain fair strong and efficient; and "encouraging innovaiton and business to flourish".
The second regtech event led by ASIC focused on financial advice.
Speaking on collaborations for better consumer outcomes, Crennan recalled the $119.7 million in compensation paid out to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.
“The status quo is no longer an option.
“ASIC expects more. Consumers expect more.
“As our financial services systems become larger, more complex, digitised - that is a word he quipped - and globalised, the expectations from regulators relating to compliance and risk remain high.
“As technology’s potential becomes more obvious, consumers’ expectations are rising.
“We do expect financial services organisations to keep up.
“ASIC expects more. Consumers expect more."
“We’re all aware of the consequences of not keeping up, particularly relating to the provision of financial advice.”
“Change most relevant to this event is our program to build capability in behavioural sciences, data analytics and artificial intelligence.”
Crennan said that finding the right balance between protecting consumers, ensuring markets remain fair, and encouraging innovation and businesses to flourish where his top priorities.
Over the last six months, ASIC increased its overall Wealth Management–related investigations by 216 per cent, according to Crennan.
“In order to improve risk-management and minimise compliance risks, consumers must include the capacity to explore, test, and implement ‘compliance-by-design’ regtech solutions within business models.
“Obviously, none of us know what the future holds in this space.
“It’s a learning exercise.
“None of us can doubt that technology is front-and-centre of financial services provision,” Crennan said.
As a direct result of industry’s uptake of regtech, he said it would be ideal to witness a decrease in the number of ASIC’s compliance-related enforcement actions.
ASIC highlighted the need for effectiveness and tech innovation in their four-year strategic change program, which began in 2018.
“If regtech can streamline and simplify compliance, the benefit to consumers and users of our financial system is that we can all focus our resources and investigations elsewhere.
“That would be a preferable outcome for regulator and regulated alike.
“It’s also critically important that ASIC expedites retch innovation – or supervisory tech – for itself, as much as everyone else.”