ASIC vows four-year focus on technology

The Australian Securities and Investments Commission (ASIC) has announced it will focus on promoting "strong and innovative development" for the country's financial system.

The four-year focus, announced in its 2020-24 corporate plan [PDF] on Monday, will see ASIC make better use of data to inform its regulatory decisions by using artificial intelligence (AI) techniques, such as machine learning and text and voice analytic solutions.

It will also undertake new and recurrent collections of data, share data with other agencies, create partnerships with commercial data providers, embed automation and AI tools into its data governance practices, and forge new partnerships with domestic and international regulators and others to ensure it is using data the right way.

The four-year plan will also see ASIC address harms to consumers, investors, and markets that may arise as a result of technological shifts.

In facilitating advancements in technology that are beneficial to consumers, investors, and markets, the corporate regulator said it would also support the fintech, suptech, and regtech sectors through its innovation hub and newly announced enhanced regulatory sandbox.

See also: Aussie finance regulators work alongside startup scene in the name of innovation

Such guidance will include help in the context of new technology adoption necessitated by COVID-19.

In addition, ASIC has vowed to contribute to domestic and international discussions on innovation and cooperate with domestic and international regulators.

It said it would promote the application of regtech to deliver better regulatory compliance and consumer outcomes as well as for assessing and understanding the effect of new technologies on the competitive landscape of markets.

In an attempt to mitigate against potential harms arising from technological change, ASIC will also conduct surveillance of established and emerging markets where there may be threats of digital disruptions and harm, particularly where the risk has increased as a result of the pandemic.

ASIC will identify and address technology, security, and operational failures that result in harmful outcomes for consumers, investors, and markets, or expose them to fraud, as well as identify and address potential technological failures that may have a systemic impact on the market or the capacity for intermediaries and operators to comply with their obligations.

It is also planning on raising industry standards such as market integrity rules -- for market operators and participants for managing systems and controls -- and will review potential risk concentrations.

This will include supervising ASX's implementation of new infrastructure to replace the existing CHESS cash equities clearing and settlement system to "minimise risks and promote competition".

Internally, ASIC will be focusing on its people.

"We will continue to focus on building a resilient and agile workforce in response to change, particularly in the new remote working environment," it wrote.

"We will use data to help us make effective decisions on staffing and resourcing, and plan for succession and secondments to ensure we have the right skills to carry out our regulatory priorities.

"We will work to ensure our staff are equipped with skills across a wide range of areas such as data analytics, emerging technologies, supervision and enforcement, and stakeholder engagement to achieve our vision."

It said it will be recruiting and developing data management specialists, analysts, and engineers with relevant expertise to increase data literacy across the organisation as well as support and grow its data capabilities.

The regulator said it was also committed to strengthening its own technological and data capabilities over the next four years.

"We will continue to explore, pilot, and adopt the latest technologies to enhance our integrated digital platform through which to conduct our regulatory activities and achieve better outcomes for consumers and stakeholders," ASIC said.

It hopes to achieve this by improving the way it collects, governs, uses, and shares data, and in doing so, streamlining the way it interacts with regulated entities and the way they interact with it. The regulator hopes this will facilitate more efficient processes for regulated entities to help them achieve compliance.

ASIC will also pilot new technology to "support more efficient management of the use and provision of legal services"; expand its cloud footprint to reduce operational complexity; leverage recent investments in enforcement technology and investigative analytics; collaborate with vendors as well as other regulators on emerging technologies that support its regulatory remit; use technologies to help provide a safe working environment; and upgrade its market surveillance systems to more effectively use cloud technologies and data analytics to support surveillance work.

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