In a speech delivered to the Perth Fintech Meetup, ASIC Commissioner John Price discussed some of the initial results of ASIC’s Innovation Hub, the establishment of the Regulatory Sandbox and the increasing focus of ASIC on regtech.
The Innovation Hub was established in 2015 to provide informal assistance to fintech startups. The Commissioner provided the following statistics on engagement by startups with the Innovation Hub:
- the Innovation Hub has worked with 165 entities, with 125 of those entities receiving informal assistance;
- ASIC has granted 33 new Australian financial services licences and Australian credit licences to entities which had applied for Innovation Hub assistance; and
- Innovation Hub engagement, on average, results in a material reduction in licensing time.
Commissioner Price discussed how the Regulatory Sandbox was set up in December 2016 for three key reasons: to improve implementing products to market by creating an environment for fintechs to test without a licence, creating greater flexibility around organisational competency requirements and improving access to capital. The Regulatory Sandbox includes a class waiver allowing eligible, unlicensed fintech businesses to test products. We discussed the licensing exemption in a previous update available here.
Finally, the Commissioner discussed ASIC’s increasing focus on regtech, emphasising that regtech had the capacity to support ASIC in the way it engaged with industry. It was noted that since mid-2016, when ASIC updated the Innovation Hub to include regtech, ASIC has had over 30 meetings with regtech stakeholders and service providers and a recent ASIC regtech roundtable gathered more than 100 industry attendees.
ASIC is developing its own in-house regtech capabilities to efficiently regulate Australian financial markets, assisted by the Australian Taxation Office, Data 61 and the Advanced Analytics Institute. The Commissioner discussed regtech applications which ASIC was already implementing, providing the following examples:
- a cognitive tool to analyse webpages of accountants that offer self-managed superannuation funds services;
- machine learning applications assessing document sets to identify useful evidence;
- a social media monitoring tool; and
- markets and graph analytic tools to support identification of connections between entities.
The Commissioner stated that ASIC was enthusiastic about hearing from businesses offering regtech solutions and those seeking assistance in establishing regtech businesses.