ASIC boosts support for regtech
ASIC is ramping its support for regulatory technology businesses or ‘regtechs’ in response to an overwhelming number of organisations expressing frustration over complex compliance burdens.
The corporate watchdog recently announced the next phase of supporting regtech’s technological capabilities in helping clients meet regulatory obligations, by way of conducting technology trials such as cognitive and social media monitoring, and assessing machine learning applications.
According to a study conducted by financial services technology provider TAS, an overwhelming number of organisations are feeling the pinch when it comes to compliance, with 76% facing rising compliance costs and having to hire more staff to manage these issues.
A key message organisations want to send regulatory bodies is to reduce the amount of red tape and pace of change (62%).
Anthony Quinn, co-founder of AML Accelerate – a regtech combatting anti-money laundering and counter-terrorism financing – said the move by ASIC and other bodies shows regulators are a lot more open to how technology can solve problems.
Quinn told the TAS Compliance Index media roundtable that there are about 14,000 regulated entities in Australia under international pressure from the Financial Action Task Force (which monitors the global financial system against illegal activity). The entities are being requested to broaden their rules to accommodate the Taskforce,
including non-financial businesses such as accountants, lawyers, real estate agents, and high value dealers. This could drive the number of regulated entities to 120,000 and without supporting technology, there’s no way that market can be effectively regulated, he said. ASIC’s initiative in supporting regtechs is a way of accelerating the journey for them, he added.
Quinn said the difference between fintech and regtech is that “fintechs are disrupting the banking community, whereas regtechs are helping companies meet compliance obligations and effectively helping regulators regulate.”
ASIC announced its interest in regulatory technology in mid-2016, holding some 30 meetings with regtech stakeholders and service providers to date.
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