Regulating for the future: Innovation, disruption and cyber resilience
A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission, AFR Banking & Wealth Summit 2016 (Sofitel Wentworth, Sydney) 6 April 2016
Good morning everyone. It is great to be here at the AFR Banking & Wealth Summit to talk about Regulating for the future: Innovation, disruption and cyber resilience.
You might say that we are in a time of rapid evolution – or perhaps a new revolution.
The First Industrial Revolution used water and steam power to mechanise production; the Second Industrial Revolution used electric power to create mass production; and the Third Industrial Revolution used electronics and information technology to automate production.
Now Klaus Schwab, Executive Chairman of the World Economic Forum, has said that we are right in the middle of the Fourth Industrial Revolution – the digital revolution.
While digital innovation is not a new phenomenon, the scale, breadth, speed – and potential – of this innovation is unprecedented.
We are now surrounded by mobile devices and data, and we are seeing many new developments in areas such as robotics, self-driving cars and smart buildings.
In financial services we are seeing automated financial advice (robo-advice), new developments in payments and the potential of distributed ledger (or blockchain) technology.
Consumers have a lot to gain from technological innovation. Technology has made possible new products and services that streamline our lives, make things more convenient and lower costs.
At the same time, changing consumer demographics, consumer engagement and behaviour are forcing businesses to change the way they design and deliver products.
We are seeing incumbents being disrupted by agile, innovative competitors who can often deliver value with greatly improved quality, speed, or price.
We are also seeing the development of the ‘sharing’ economy which is disrupting existing industry structures – and is underpinned by technology enabled platforms.
In financial services, fintech is not only transforming the way consumers operate and manage their finances, it is disrupting the traditional banking industry.
We used to think about fintech as something that wasn’t a big deal – something new that would operate on the edges and wouldn’t really shift the customer base.
But now the evolution of fintech is being embraced rapidly by consumers, who see the clear benefits it brings – like improving ease of payments, improved speed and convenience and lower costs.
Technology and innovation is disrupting and reshaping the world we live in. It is against this backdrop that I would like to talk about three things:
- what innovation and digital disruption means for ASIC
- how ASIC is responding to digital disruption, and
- how regulators need to position themselves for the future.