ASIC, AUSTRAC and banks urged to engage with regtech start-ups amid controversy

A batch of start-ups will engage with banks and regulators about creating a “compliance-by-design” culture in financial services later this week at an inaugural RegTech Association event and are hoping conversation will soon turn to action.

The expected release on Tuesday morning by the Australian Prudential Regulation Authority of a report into governance problems at Commonwealth Bank, and the interim profit results this week of the other major banks which are under pressure for failing to verify whether customers can repay loans, will illustrate the value of the nascent regtech sector.

But while the big banks love to talk about innovation, they find it very difficult to achieve in practice.

One of the key issues at the #ACCELERATERegTech2018 event on Thursday and Friday will be a focus on using technology to tackle financial crime – an issue that could be front and centre in the APRA report on CBA.

This may point to underinvestment in systems to monitor suspicious activity, which is ironic given how much CBA has loved to talk about its technological prowess.

Income and expense verification

Another core regtech issue is improving income and expense verification by tapping broader data sources – a big problem to have emerged from the banking royal commission. ANZ, which will report its first-half results on Tuesday, was fingered by the inquiry for failing to properly check the expenses of borrowers.

New start-ups are putting themselves forward as part of the solution to meet stricter lending obligations, including Verifier, whose founder, Lisa Schutz, is also director of the RegTech Association.

To read more about regtech start-ups, please click on the link below…

Source: ASIC, AUSTRAC and banks urged to engage with regtech start-ups amid controversy | afr.com