ASIC Regtech Financial Advice Files Symposium - Opening statement


Opening statement by Daniel Crennan QC, Deputy Chair, Australian Securities and Investments Commission at the ASIC Regtech Financial Advice Files Symposium, (Sydney, Australia) 22 August 2019


Welcome everyone, both in person and those of you who’ve joined us via YouTube livestream.

Before I begin, let me thank Aunty Ann Weldon for her Welcome to Country, and pay my respects to the Traditional Owners of these lands, and to their elders – past, present and emerging.

In my capacity as Deputy Chair I’m delighted to open this second event in ASIC’s Regtech Initiative series.

After the positive feedback ASIC received from the Monitoring Financial Promotions Symposium on the second of August, I look forward to seeing what the demonstrators have in store for us.

Today is about collaboration to achieve better outcomes for consumers.

Speaking on behalf of the commissioners, we want to position ASIC as a strategic and agile regulator.

As my colleague Commissioner Cathie Armour said when she opened the previous Regtech Symposium on the second of August, ASIC is here to listen, learn and keep an open mind.

We are here to find the right balance between:

  • protecting consumers;
  • ensuring markets remain fair, strong and efficient; and
  • encouraging innovation and businesses to flourish.

We’re here to showcase new technologies that have the potential to help advisers and entities meet their regulatory and professional requirements.

The status quo is no longer an option.

ASIC expects more.

Consumers expect more.

As our financial services systems become larger, more complex, digitised and globalised, the expectations from regulators relating to compliance and risk remain high.

As technology’s potential becomes more obvious, consumers’ expectations are rising, also.

And we do expect financial services organisations to keep up.

We’re all aware of the consequences of not keeping up, particularly relating to the provision of financial advice.

We only need to recall the $119.7 million in compensation as at 30 June 2019 that has been paid out to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.

As many of you know, besides being Deputy Chair I am also the sponsoring commissioner of ASIC’s Office of Enforcement.

Our Annual Report data shows that in January to June 2019, ASIC stopped 24 people from working in the financial services industry. Thirteen of them gave financial advice.

In this same six-month period, one financial adviser received a 10-year jail sentence for engaging in dishonest conduct.

Within the last six months, ASIC increased its overall Wealth Management–related investigations by 216%.

In order to improve risk-management and minimise your compliance risks, you must include the capacity to explore, test, and implement ‘compliance-by-design’ regtech solutions within your business model.

Obviously, none of us know what the future holds in this space.

It’s a learning exercise.

And none of us can doubt that technology is front-and-centre of financial services provision.

We’re here to learn about future consumer demands; what the strongest technology use-cases are; and what roles industry and regulators should take with regard to regtech.

So I reiterate my earlier point that all of us – industry, government and regulators – should keep an open mind and maintain an active stance on everything we come across during this Regtech Initiative series.

It would be ideal to witness a decrease in the number of ASIC’s compliance-related enforcement actions as a direct result of industry’s uptake of regtech.

Because 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 regtech innovation – or supervisory tech – for itself, as much as everyone else.

If we can lessen our own operational and delivery burdens, we can speed up our own processes and improve our own effectiveness.

This is something we have flagged in our Four-Year Strategic Change Program, which began in 2018.

The change most relevant to this event is our program to build capability in behavioural sciences, data analytics and artificial intelligence.

And we are increasing our coordination and exchange of information about regtech initiatives with other regulators, both here and abroad.

I want to thank the host, YBF Ventures, as well as the demonstrators, commentators and panellists for their contribution to today’s proceedings.

I would also like to thank you all for attending.

And I would like to thank the ASIC team, which has worked very hard on this event.

I hope you enjoy today’s Regtech Financial Advice Files Symposium.

I hope you can attend more events like this one, as well as the other engagements ASIC, and our collaborators, host across the regtech space.

Thank you.

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