John Price outlines the key issues and themes to emerge from the regulator’s first roundtable on the use of technology to address regulatory requirements.
On 8 February, the Australian Securities and Investments Commission (ASIC) hosted its first RegTech Roundtable in Sydney and Melbourne. The event garnered a strong turnout with more than 100 people participating in a robust discussion on the RegTech landscape.
RegTech refers to the accelerating use of technology solutions to address regulatory requirements. It is already a core element of risk and compliance frameworks for some parts of the Australian financial system, such as the monitoring of financial markets activity. However, the use of RegTech is rapidly evolving, and is now extending to a broader range of areas to assist businesses to meet their regulatory obligations.
ASIC chose to host a roundtable on RegTech, as we believe this area should be top of mind for both regulators and the private sector. The reason is simple: the RegTech sector has enormous potential to help organisations build a culture of compliance, identify learning opportunities, and save time and money relating to regulatory matters. It is for this reason that regulators the world over are also seeing the potential of RegTech to complement the work they already do.
The roundtable was organised as part of a broader strategic outreach by ASIC to the RegTech sector, which started late last year, and expanded ASIC’s existing engagement with the fintech sector through its innovation hub.
Facilitated by Kim Heras of start-up studio, 25fifteen, the roundtable included speakers from key industry stakeholders including KPMG, Blackhall & Pearl, Thomson Reuters and BlackRock Solutions.
The first session focused on discussion of the current RegTech landscape and its development and future potential to promote good risk management and compliance outcomes.
Building on this, the second session focused on the commercial, regulatory or practical barriers that may inhibit the future potential of RegTech in Australia. Options to respond to these barriers were then explored, including the steps that industry and ASIC can take to help promote the development and application of RegTech.
The key issues and themes raised by industry attendees during the two sessions included:
- Concerns in relation to data: namely, who owns it, who can access it and how it can best be used, given that currently only a minute fraction of the existing available data is effectively used.
- How to successfully harness the opportunities of RegTech to reduce compliance costs and better supervise, monitor and improve culture within companies.
- Allowing ASIC, other regulators and compliance areas within businesses to move from a “rearview mirror” model of compliance to a learning and predictive model, where, in the words of one attendee, there is a shift from being the “policeman to the coach”.
- The importance of ASIC and other regulators adopting a technologically neutral approach and thinking proactively about issues such as digital identity and codifying rules in order to effectively use new technologies which improve efficiency and outcomes.
The roundtable discussion will inform ASIC’s RegTech focus going forward. ASIC expects to issue a report by the end of April 2017, which will include its proposed approach to RegTech development.
ASIC is keen to hear from businesses that wish to share their progress with RegTech, as well as those seeking informal assistance in developing their RegTech business.
ASIC’s innovation hub exists to foster innovation that could benefit consumers by helping Australian fintech start-ups navigate our regulatory system. The innovation hub provides tailored information and access to informal assistance intended to streamline the licensing process as much as possible for innovative fintech start-ups.
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