ASIC regtech initiative series 2018-19

ASIC considers that the regulatory technology (regtech) sector has enormous potential to help businesses build a culture of compliance, identify learning opportunities, and save time and money relating to regulatory matters. ASIC recognises that in various use cases regtech has been in deployment for some time (e.g. monitoring of trading and regulatory reporting) and is making an important contribution to promoting regulatory compliance, market integrity, and positive consumer outcomes.

On 7 August 2018, ASIC received federal government funding for financial years (FY) 2018–19 and 2019–20 to promote Australia as a world leader in developing and adopting regtech solutions to risk management and compliance problems relating to financial services. This funding meant ASIC could build on its existing engagement and collaboration approach in promoting the potential of regtech to financial firms.

ASIC used this additional funding in FY2018–19 to develop a series of regtech initiatives. These initiatives focused on the potential use of technology to help businesses deal with conduct of business compliance issues, thereby promoting better outcomes for consumers and market integrity. ASIC consciously chose difficult regulatory problems to examine the potential of regtech that is still in development, or in an experimental phase, rather than focusing on more mature services. Additional initiatives are being developed for FY2019–20.

ASIC undertook four regtech initiatives in FY2018–19:

• Monitoring Financial Promotions Demonstration and Symposium (2 August 2019)
  A problem-solving event consisting of five regtech demonstrators analysing financial promotional material from a curated dataset to extract key features to identify potential risk and non-compliance characteristics.
• Financial Advice Files Demonstration and Symposium (22 August 2019)
  A problem-solving event to investigate how regtech can be used to improve compliance in Australia’s financial advice industry. Six demonstrators used a synthetic dataset, along with key risk indicators, to test their regtech solutions in the identification of potentially non-compliant financial advice.
• Voice Analytics and Voice-to-Text Trial and Symposium (24 September 2019)
  ASIC shared findings from an ASIC regtech trial that examined how voice analytics and voice-to-text, applied to over 1,700 life insurance sales calls, may assist in identifying and analysing poor sales conduct in the financial services industry.
• Technology-Assisted Guidance (TAG) Tool Trial
  ASIC designed and developed a proof-of-concept Technology-Assisted Guidance (TAG) Tool to help businesses navigate the credit and financial services licensing regulatory framework. In this case, a proof-of-concept chatbot was developed.

For more information about ASIC's regtech series, follow the links below:

ASIC regtech initiative series 2019-20

ASIC regtech initiative series 2018-19

• Results and primary observations
• Regtech Monitoring Financial Promotions Demonstration and Symposium
• Regtech Financial Advice Files Demonstration and Symposium
• Regtech Life Insurance Sales Calls Voice Analytics and Voice-to-Text Trial and Symposium
• Regtech Licensing Technology-Assisted Guidance Tool (TAG) Trial
• Regtech approach and next steps

Read Report 653 ASIC's Regtech Initiatives 2018-19