ASIC waves big stick on adoption of regtech
The Australian Securities and Investments Commission (ASIC) has given an overt push to financial planning groups to embrace and explore technology, with its deputy chairman, Daniel Crennan QC, arguing that it may help minimise compliance risks.
In doing so, Crennan pointed out that the compensation paid to financial advice complaints stood at $119.7 million as at 30 June, this year, and to a 10-year jail sentence handed out to a financial adviser for engaging in dishonest conduct.
Opening an ASIX Regtech Financial Advice Files Symposium, Crennan said that technology’s potential was becoming more obvious and “we do expect financial services organisations to keep up”.
“We’re all aware of the consequences of not keeping up, particularly relating to the provision of financial advice.,” Crennan said. “We only need to recall the $119.7 million in compensation as at 30 June 2019 that has been paid out to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.”
Crennan pointed out that he was the sponsoring commissioner of ASIC’s Office of Enforcement and that the regulator’s Annual Report data showed that in January to June 2019, ASIC stopped 24 people from working in the financial services industry and that 13 of those gave financial advice.
“In this same six-month period, one financial adviser received a 10-year jail sentence for engaging in dishonest conduct,” he said. “Within the last six months, ASIC increased its overall Wealth Management–related investigations by 216%.”
He said that it was in these circumstances that, in order to improve risk-management and minimise compliance risks, firms had to include the capacity to explore, test, and implement ‘compliance-by-design’ regtech solutions within their business models.
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