The Australian Securities and Investments Commission (ASIC) has acknowledged that technology will be one of five challenges that will shape its outlook and strategy over the next four years.
In its corporate plan for 2015-16 to 2018-19, ASIC said technological changes have increased the risk of online attacks. As a result, in order for the commission to retain focus on being "gatekeepers to accounts," it said it will need to identify potential online attacks through real-time market monitoring and promote online resilience.
For example, it plans to use data matching and analytics to detect anomalous trading patterns that may be the result of an online attack.
Additionally, ASIC said it will establish practices to deal with online threats and technological advances through its Markets Cyber-Risk Taskforce Distribute; review financial market infrastructure to focus on governance and outsourcing; and distribute ASIC's online resilience calculator results to participating investment banks for private self-assessment and peer benchmarking.
"Cyber threats are increasingly diverse and sometimes unforeseeable. With evolution of technology and global interconnectedness, this risk is constantly changing. Cyber attacks are considered a systemic risk to the financial system, especially attacks on essential or critical services like banking and payments services, or financial market infrastructure," ASIC said.
"It is not possible for businesses or individuals to protect themselves against every cyber threat. However, we encourage firms and markets to improve their cyber resilience, particularly where exposure to a cyber attack may impact on individuals or market integrity."
ASIC also outlined the opportunities to come out of digital disruption, with one being the rise of startups. The commission said it will use its recently developed innovation hub to help fintech startups navigate through its regulatory system, and potentially take advantage of opportunities.
ASIC also speculated that going forward, technological changes may result in future developments of individually-tailored insurance as insurers increasingly have access to data and technology that allows them to price risk in a highly individualised way.
At the same time, it believes that technology will form the basis of many digital currencies, which could potentially affect the delivery of financial markets and services.