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.
ASIC is using artificial intelligence to improve its own monitoring of the market, including testing a system to listen to insurance sales phone calls, after the royal commission criticized some life insurers for hawking products to unsuspecting customers. While there is no expectation for a perfect record on compliance, banks should identify and fix problems quickly, and minimize the issues.
RegTech Association chief executive Deborah Young said she wanted to see the average two-year period it takes banks to determine whether they will buy a new technology system reduced. But she confirmed deployments are “definitely happening right now”, across anti-money laundering, product audit, income assessment, adaptive learning, and document digitization. The association is also trying to push its start-up members into financial advice and superannuation firms. She said all the major banks are “taking it seriously” but that only Commonwealth Bank is a member.