The Australian Securities and Investments Commission (ASIC) wants to establish a new RegTech advisory group before the end of the year to help advocate for support for the RegTech sector.
The proposed group – which would comprise of industry, technology firms, academia, consultancies, regulators and consumer bodies – would meet every four months to drive discussions on RegTech developments and opportunities to promote new regulatory technology.
This comes after the 19 respondents to ASIC’s Innovation Hub and our approach to regulatory technology report voted “strongly in favour” of establishing the new RegTech liaison group.
“The reason why we’re so interested in RegTech is that we see it has the potential to revive better outcomes for consumers,” ASIC Commissioner John Price told InnovationAus.com. “But it can also reduce costs in terms of compliance for large financial institutions and make that [process] more efficient.
“For us it seems that this is a win for us as a regulator, for financial institutions to do their job more effectively and efficiently, and for consumers because it should deliver better outcomes in the end.”
While ASIC claimed “most” respondents were in favour of the regulatory body creating an environment that encouraged RegTech, Mr Price said there was a real crux of concern raised during the consultation process, largely around the idea that any regulation need to be mindful in ensuring algorithms and technology are used in a way that it’s intended.
Other stakeholders suggested that ASIC should not take a leading role in development, but instead focus on providing support to the industry such as by making more data available.
The responses also addressed ASIC’s regulatory sandbox framework that was setup to assist fintech businesses to test their offerings with real customers without obtaining necessary licenses. However, it only applies to the provision of specified services or productions.
The report said a small number of respondents believe the FinTech licensing exemption should be expanded to include incumbents as well as new businesses, or to include more products.
InnovationAus.com revealed in May that only one startup has since utilised it since it was launched late last year. Although, Mr Price assured that at least 13 more startups are currently in the process of becoming eligible to test their offerings.
“One of the key things to remember is the Australian regulatory framework is already very flexible, so there are other opportunities that people can use besides ASIC’s sandbox,” Mr Price said.
“A good example is around payment cards, so ASIC gives a range of exemptions for those types of businesses.”