ASIC’s Innovation Hub helps innovative Australian businesses comply with regulatory requirements and provides a platform for international engagement on fintech and regtech ideas.
In 2019–20, the Innovation Hub team met with 103 innovative businesses, all of which received feedback and informal assistance to better understand how their business models could navigate Australia’s regulatory framework. Since March 2015, ASIC has provided feedback and informal assistance to over 550 innovative businesses.
This year, ASIC granted eight new AFS licences or credit licences to fintech businesses. Fintech businesses that had received informal assistance from ASIC before submitting their licence application were approved materially faster than those that had not sought assistance.
ASIC and regtech
ASIC received $6 million in funding over 2018–19 and 2019–20 to promote Australia as a world leader in the development and adoption of regtech solutions for the financial services industry.
ASIC applied the funding to a series of regtech initiatives in 2019–20, including:
- Financial Promotions Demonstration and Symposium (2 August 2019)
Five selected demonstrators analysed financial promotional material (traditional and non-traditional media) to extract key features identifying potential risk and non-compliance characteristics.
- Financial Advice Files Demonstration and Symposium (22 August 2019)
Six selected demonstrators investigated how regtech solutions can be used to improve compliance in Australia’s financial advice industry, providing better outcomes for consumers.
- Voice Analytics and Voice-to-Text Trial and Symposium (24 September 2019)
Three procured regtech entities presented on findings from the ASIC Voice Analytics and Voice-to-Text trial held from April to July 2019, assessing how voice analytics, applied to over 1,700 life insurance sales calls, could analyse and identify selling behaviour that fell short of community expectations.
The results and findings of the first year’s initiatives were set out in Report 653 ASIC’s regtech initiatives 2018–2019, published on 20 December 2019.
We are further analysing the potential of regtech to assist in responsible lending and developing trials of supervisory technology (suptech) tools geared towards financial promotion monitoring and advanced text analysis of prospectuses.
Domestic and international engagement on innovation
ASIC and its Innovation Hub continue to collaborate with other regulators, government agencies and industry associations.
This year, the Innovation Hub team hosted quarterly Digital Finance Advisory Panel meetings and Regtech Liaison Forum events, bringing together industry leaders and regulatory representatives to discuss fintech- and regtech-related developments, issues and opportunities.
ASIC is one of 11 coordination group members of the Global Financial Innovation Network (GFIN), which consists of 50 national financial sector regulators and supervisors, as well as seven observers, across 21 jurisdictions.
The GFIN is committed to supporting financial innovation in the interests of consumers by creating a framework for cooperation between regulators to share experiences and approaches to innovation.
ASIC was a key participant in the GFIN’s cross-border testing pilot, an initiative looking to allow firms to simultaneously trial and scale new technologies in multiple jurisdictions. Learnings from the pilot were published by the GFIN in January 2020.
ASIC is also a member of the steering committee for the IOSCO Fintech Network, established in mid-2018, which focuses on information sharing across regulators. ASIC is a member of each of the network’s four workstreams on distributed ledger technology, artificial intelligence and ethics, regtech, and approaches to innovation.