Ahead of next week’s budget, Australian Securities and Investments Commission (ASIC) commissioner John Price has suggested that in order for it to effectively regulate Australia’s emerging RegTech and FinTech markets, it needs more resources.
“There’s plenty for us to do. The real question is just picking what is the right thing to do,” he told InnovationAus.com.
In fact, ASIC is now even under more pressure to get things right, following the recent royal commission into the financial services sector that unearthed how the regulatory body’s inaction may have led to some of Australia’s largest banks getting away with serious misconduct, including fraud and bribery.
Mr Price believes that as a result of the royal commission, financial institutions have already begun to sharply shift their focus on making “good outcomes for consumers in what they do” and highlighted that RegTech is one part of achieving that.
“When you think about it there is also making sure an organisation has the right structure and tools to deliver a good outcome; the right technology, which is where RegTech comes in; the right analytics so it can see where the problems might be and respond to the those problems; and it has the right data coming in,” he said.
“You can have the best technology but unless you’ve got the right data, you’re not going to get the right decision.
“Overarching that is having the right culture to deliver better consumer outcomes and governance to support that goal.”
Mr Price was speaking at the RegTech Association’s inaugural summit in Sydney on Thursday. He says RegTech will help facilitate digital systems that will allow financial institutions to be more proactive and strategic, and help with the compliance nightmares currently faced by large institutions.
“Organisations see great potential in RegTech because at the moment compliance processes can be highly manual, very paper based, and therefore subject to errors. They can also be very costly and reactive as well,” he said.
Mr Price is bullish about Australia’s future in RegTech, pointing out how the Asia Pacific region is home to the largest number of RegTech headquarters. “Australia is very well placed already as far as RegTech,” he said.
To date, ASIC has focused on RegTech through its innovation hub, which Mr Price says has resulted in the organisation entering into a number of cooperation agreements with various overseas regulators.
“This enables us to provide introductions between Australian RegTech providers and overseas people if they wish to expand overseas.”
ASIC is also currently looking into using natural language process, with plans to kick off trials as soon as it finalises its procurement process, which has since received 30 submissions.
“We’re very interested in natural language processing and how we might ourselves use that as a regulator.”
As far as open banking regime is concerned, the responsibilities to regulate it are expected to fall under the watch of the Australian Competition and Consumer Commission (ACCC).
No doubt this means we can expect Treasury to be handing over some additional resources to the ACCC during next week’s budget.