ASIC gets tough on 'regtech'

Banks will have to explain why they aren’t using the latest technology to improve their compliance, as the corporate regulator takes a “bolder” approach after the shortcomings revealed by the banking royal commission.

Australian Securities and Investments Commission executive director of financial services Michael Saadat said an “if not, why not” approach would be adopted to force banks to explain why, when they aren’t using the latest technology including systems offered by start-ups.

Commonwealth Bank told The Australian Financial Review Banking & Wealth Summit it was talking to ASIC about its roll out of artificial intelligence technology to help it understand its legal obligations.

“In the past, we have probably more cautious about being prescriptive about particular types of technology, but it is looking like we will be bolder about that in the future,” Mr Saadat said.

“I don’t think we would say: ‘you must use a particular type of technology’, but it will probably reach the point where if you aren’t using a type of technology, you have some explaining to do,” he said.

“We will certainly be encouraging very strongly the adoption of these technologies, so we achieve the end outcome we are looking for without the expensive compliance overlay that otherwise would be required.”

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Source: ASIC gets tough on ‘regtech’