Post: ASIC Annual Forum 2023: Navigating disruption – regulator perspectives

Australia’s financial system and consumer protection regulators are positioned strongly to protect consumers from emerging harms related to digital disruption, the ASIC Annual Forum was today told.

The regulatory landscape is rapidly evolving due to challenges including artificial intelligence (AI), cryptocurrencies and cyberattacks.

But Australia’s financial services and consumer protection regulators are well placed to respond to these emerging threats.

The risks of new technology to consumers, investors and overall market integrity are a key strategic priority for ASIC. As structural changes and disruption occur, ASIC will continue to adapt its approach to uphold the safety and integrity of the financial ecosystem.

At the ASIC Annual Forum today, Gina Cass-Gottlieb, Chair of the Australian Competition and Consumer Commission (ACCC), spoke of the importance of strong regulation in navigating disruption.

“In the context of the pressures of cost of living, pressures of uncertainty and volatility in financial markets and more broadly, it is just a year in which the community trust in regulators and regulation is really ever more important.”

From the ACCC’s point of view, she said: “We see that regulation supports competition on the merits… Effective competition, as distinct from misuse of market power, will enable competition that will produce greater productivity, greater innovation.”

ASIC Chair Joe Longo said: “We live in a complex operating world, major institutions like banks and telcos who have the resources and access to the technology, the expectation in the 21st century, is that you will harness technology, systems and processes to not only comply with the law, but to deliver the services and products that we have come to expect. But that does require good systems.”

John Lonsdale, Chair of the Australian Prudential Regulation Authority (APRA) said the collapse of Silicon Valley Bank, Credit Suisse and other regional banks overseas was a “test of the financial system we’ve got and the prudential regulation that goes around that”. Adding that, thanks to the regulator’s efforts, “we’ve been able to maintain confidence in the system.”

“We’ve spent a lot of time at APRA, really since the formation of APRA, building an armour-plated prudential system,” he said. The result was a “very safe, well-functioning financial system.”

Regulators are also embracing the opportunities presented by technologies to stay ahead of the curve and better protect consumers.

Mr Longo said: “We have this technology coming at us. We have to use that technology to deal with that technology. We have to use the same tool. Because that’s part of our world now.”

“AI poses real challenges for regulators. However, I do accept that the same technology also creates great benefits for society.” Those benefits, he said, included for regulators.

Echoing Mr Longo’s sentiments, Ms Cass-Gottlieb said in tacking the potential harms to consumers, “part of the answer is, we need to use AI.”

In relation to the National Anti-Scam Centre, Ms Cass-Gottlieb said the ACCC, ASIC and others were using technology in multiple ways, including to allow “near to real-time data-sharing across the ecosystem” among regulators, law enforcement and industry to capture as quickly as possible knowledge of new scams.

Transformative technologies
ASIC is harnessing new and sophisticated technologies to quickly identify threats in our regulatory environment and drive more efficient, informed, and targeted regulation.

We are one of the first regulators in the world to be using advanced technology to take down phishing and scam websites as part of a proactive approach to protect consumers from harm.

Our award-winning Project ARTEMIS is applying automated technology to improve our ability to detect and disrupt insider trading and market misconduct.

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