Speaking before a parliamentary committee on the oversight of the Australian Securities and Investments Commission (ASIC) on Friday, the chair of the corporate regulator, Joe Longo, said enforcement and compliance work in financial regulation is undergoing a profound shift towards digital integration.
Recognising the pivotal role of technology in modern regulatory landscapes, Longo said ASIC is embarking on a strategic digital transformation aimed at enhancing efficiency, effectiveness, and responsiveness in regulatory oversight.
“The Financial Regulator Assessment Authority (FRAA) recommended that ASIC needed a substantial uplift in its data and technology capability. ASIC wholeheartedly agrees with this recommendation,” the chair said.
“ASIC is in a digital arms race, with AI rapidly being adopted in financial services firms and digitally enabled misconduct is on the rise. We need to be a leading digitally enabled and data-informed regulator who is ahead of the game.”
As such, Longo said, ASIC is ramping up its digital arsenal. Moreover, he shared that central to ASIC's digital agenda is the development of a comprehensive digital target state, supported by initial funding secured in the recent federal budget.
“We have developed a digital target state and we received initial funding in the recent federal budget to commence a program of work to uplift our cyber security across our regulatory systems which will set us on firm foundations for our digital uplift.
“We will now move to implement these initiatives, including a new ‘threat intelligence platform’ to improve information collection and real-time detection of internal and external cyber threats.”
ASIC’s commitment to digital transformation also extends to revolutionising its data and analytics capabilities, Longo said.
“Last year, ASIC seized and reviewed 2.6 million documents, as part of its investigations. The time to collect, process and sift through this volume of data to find the ‘needle in the haystack’ and make the connections with other datasets we’ve previously collected is exceedingly labour-intensive, relying heavily on manual efforts from our investigators.
“Bolstering our data and analytics capabilities through investment in creating a unified view of entities, coupled with advanced analytics, would significantly expedite ASIC’s ability to connect disparate datasets and accelerate the investigation process.”
Moreover, Longo highlighted that transitioning to a “leading digitally enabled and data-informed regulator” diminishes the reliance on human intuition and experience for decision making.
“A further uplift in data capabilities will empower ASIC to make more timely decisions regarding resource allocation and fine-tuning of priorities across prevention, investigation, and enforcement efforts.
“These advancements will enable us to achieve better outcomes and bolster public trust and confidence in the Australian financial system.”
Longo also disclosed that as of 30 April, over a 12-month period, ASIC has initiated more than 130 new investigations, marking a 25 per cent increase, filed 29 new civil proceedings in the Federal Court involving 64 defendants, and facilitated charges against 23 individuals by the Commonwealth Director of Public Prosecutions (CDPP).
“ASIC is one of the nation’s most active law enforcement agencies. Amongst our domestic peers, I don’t think you will find a regulator in court more often than we are,” Longo said.
