ASIC Chair Joe Longo

ASIC is tracking major shifts across Australia’s financial system as pressures on consumers, markets and businesses intensify.

In 2026, continued cost‑of‑living strains for vulnerable Australians, rising debt and ongoing geopolitical tensions are adding volatility and uncertainty. At the same time, rapid advances in AI are transforming financial services—and fuelling a surge in AI‑powered cybercrime that is testing the resilience of companies and undermining public trust in AI‑driven decisions.

Market structure is continuing to evolve, with private markets expanding and digitalisation accelerating. Meanwhile, changes to ASX governance requirements may reshape how listed companies operate, influencing transparency and market confidence.

Global regulatory settings are also diverging, creating growing fragmentation that makes compliance more complex and increases the risk of uneven consumer protections.

These system‑wide forces cut across all sectors ASIC regulates.

Highlighting the key issues for 2026 helps direct attention to where risks are most likely to emerge and underscores where ASIC is focused to safeguard trust, integrity and confidence in Australia’s financial system.

The issues outlined are not ranked.

Increased retail client exposure to private credit markets

Retail access to private credit and other private market products is expanding, with investment thresholds as low as ~$2,000, and investment platforms (including superannuation) enabling participation in inherently less transparent and in some case more complex products.

This raises risks of mis‑selling, unsuitable product selection, and decision‑making without adequate disclosure. As ASIC identified in November (REP 821), private markets are opaque, and Australia has limited regulatory reporting outside superannuation, meaning constrained supervision and potential heightened risks for investors.

Operational failures by superannuation fund trustees leading to member harm

Member services problems like delays in processing claims, inadequate support and services for customers, poor IT infrastructure and cyber resilience, and escalating risks of fraud and scam activity all underscore superannuation fund operations as a key issue for ASIC in 2026.

Those operational failures by trustees or administrators can result in significant financial losses, compound distress for people facing difficult circumstances, and of course erode trust in the system as a whole.

With nearly three million Australians set to become eligible to access their superannuation over the next decade—and more than $750 billion expected to move from accumulation into retirement—it is essential that the superannuation system is prepared to manage potential operational challenges.

Consumers losing their retirement savings through investments in high-risk products, including as a result of high-pressure sales tactics and inappropriate financial advice

Aggressive marketing, lead‑generation and “cookie‑cutter” advice models have been driving switches of superannuation into complex, high‑risk investments that are often unsuitable for average consumers, for example through certain managed investment schemes.

ASIC is working closely with government and consumer groups to address legal and regulatory gaps, and deliver education campaigns to empower Australians to better identify risks to their retirement savings. While the pathway to compensation can be uncertain when these schemes collapse, ASIC has 12 court cases underway related to the Shield and First Guardian matters to hold people and organisations to account.

Advanced technology harming consumers (including agentic AI)

We are increasingly seeing consumers face risks from automated decisions, AI-driven interactions, and scams amplified by technology.

The rapid adoption of technology enables new forms of conduct that exploit issues like behavioural bias. As ASIC has found in research, there is variable maturity in how businesses manage AI governance risks. While agentic AI can help people shop around for deals and avoid loyalty penalties, it can also compound risk given its capability to independently plan and act.

Cyber-attacks, data breaches and/or inadequate operational resilience and crisis management undermine market confidence and harm consumers

Reporting shows increases in hotline calls to the Australian Cyber Security Hotline, incident responses, and threat notifications, reinforcing the need for vigilance and uplift across sectors.

Digitisation, legacy systems, reliance on third parties, and evolving threat actor capability continue to elevate cyber risk in ASIC’s view. ASIC is urging directors and financial services license holders to maintain robust risk management frameworks, test their operational resilience and crisis responses, and address vulnerabilities with their third-party service providers.

Regulatory gaps related to emerging financial sector participants (digital assets, payments, users of AI) and others on the regulatory perimeter

Rapid innovation by or for people unfamiliar with financial services - particularly in digital assets and fintechs - continues to create risks including with unlicensed advice, misleading conduct, and the exploitation of unclear regulatory boundaries.

Where a business is currently legitimately unregulated, it is ultimately for government to determine whether a new class of products or services should be brought within a licensing regime.

At the same time, some entities will actively seek to remain outside regulation, contributing to perceived regulatory uncertainty. As a result, ensuring clarity on licensing requirements and maintaining effective perimeter oversight will remain priorities for ASIC in 2026.

Poor insurance claims handling, particularly following extreme weather events

The disasters in Victoria and Queensland in recent weeks underscore the pressures insurers face during concurrent and severe events that can lead to poor consumer outcomes including delays, errors, and poor communications.

ASIC has commenced court proceedings concerning serious claim handling failure and will continue to hold the sector to account. The volumes and costs from disasters highlight challenges insurers face, particularly with claims handling.

Failure or significant outage resulting from the implementation of CHESS replacement or due to the ongoing use of the aging infrastructure of the current system

CHESS is critical national infrastructure that is fundamental to orderly markets.

While the first phase of its replacement is due this year, the December 2024 outage provided a real-world example of why that replacement cannot come soon enough.

Delays or failures in the CHESS replacement project pose a major risk to market stability, operational resilience, and investor confidence. The risk is heightened by the ongoing reliance on aging technology, which increases the likelihood of technical failures and operational harm.

Poor quality financial reporting, sustainability reporting and audit quality

Financial reports and audits are key to maintaining market confidence and informed investor and consumer decision making.

ASIC is concerned with evidence it has found in superannuation financial reports of inconsistent investment disclosures, limited transparency on certain expenses, and insufficient audit evidence for valuations.

As mandatory sustainability/climate reporting expands, there are also risks of misleading or incomplete disclosures.

Increased risk appetite in the banking sector in response to competitive pressures that results in consumer harm

ASIC notes that historic low net interest margins in banking may be driving parts of the sector towards riskier strategies.

ASIC is alert to conduct that pushes regulatory boundaries to circumvent the application of the law that would lead to unfair investor losses and consumer harm.

The competitive dynamics at play in Australia could incentivise relaxed credit assessments, larger or unsuitable loans, product changes for lower‑margin customers, and aggressive marketing that steers consumers towards higher‑risk products.

For more information about ASIC’s work, see the ASIC Corporate Plan 2025-26.