Longo’s parting shot: Australia faces ‘lost generation’ without fintech overhaul
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The news: Australia risks ending up with a “lost generation…consigned to a poorer standard of living” if the country does not increase its development and safe adoption of new financial technologies, outgoing ASIC chair Joe Longo will warn in his final public appearance.
The context: In a speech at a Tech Council of Australia event on the Future of Innovation in Australia’s Financial Services Sector, Longo will stress that “we are in a global innovation race. If we do not embrace new market technologies now, we could be poorer for it as a nation in the future”.
He will urge regulators and investors to help provide pathways to help startups flourish and financial innovations such as automating and using AI in credit underwriting, product management and disclosure.
A financial markets innovation roundtable will be hosted by ASIC in June, with Longo calling for “fresh thinking and innovative ideas from all market participants” even if some in the market are “scared to try something new”.
He will also stress that while Australia is currently a leader in buy-now-pay-later regulation and real-time payments infrastructure, gaps in other areas will “only widen if we don’t act now. And other nations stand poised to reap the benefits”.
Longo will say that “regulation that focuses less on a prescriptive approach to specific technologies and more on key principles of accountability and oversight — can support innovation”.
“That means we need a principles-based regulatory framework that allows innovation to occur, while maintaining high governance and conduct standards.
Longo will warn that “technology is moving faster than any of us can comprehend, and if we miss the boat, there is a real risk that we will fall behind”.
At the event, Longo will also release new ASIC-commissioned research undertaken by the Digital Finance Cooperative Research Centre that outlined key areas of technology development that require further regulatory attention. This includes:
- Expanding open finance infrastructure
- Strengthening governance of AI financial services
- Adapting regulation to platform-based finance
- Monitoring concentration on provision of technology services
- Developing supervisory technology that enable financial regulators to automate data collection and risk monitoring
What they said: “Technology is moving faster than any of us can comprehend, and if we miss the boat, there is a real risk that we will fall behind,” Longo will say.
“We must all foster a culture that backs innovation…We cannot let complacency chart our future. That is why we must continue to work together to break down barriers around innovation. This challenge is bigger than any of us alone can tackle.”
The sources: Joe Longo speech, DFCRC report on Innovation in Financial Technology and RegTech, ASIC media release
