ASIC on front foot for digital disrupters


By Julie May

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The great drawcard of digital disruption was the opportunity that came with it, ASIC chairman Greg Medcraft said at the Boao Forum for Asia in Sydney yesterday.

“Global investment in fintech ventures tripled to US$12.2 billion in 2014, from US$4 billion in 2013,” he said, as businesses saw the potential for new ways of creating and sharing value with technologically savvy investors and consumers.

He pointed to the potential of peer-to-peer and marketplace lending, robo advice, crowd-funding and payment infrastructures such as digital currencies and Apple Pay.

“We will likely see further developments in individually tailored insurance, such as QBE’s Insurance Box, and exchanges using the potential of ‘blockchain’ technology,” Medcraft said.

But these businesses often had innovative business models that might not neatly fit within existing regulatory frameworks or policy, he said.

“As a proactive and forward-looking regulator, we want to help industry take advantage of the opportunities on offer, but we also want innovation that fosters investor and financial consumer trust and confidence,” he said.

Medcraft highlighted one way ASIC was striving to take a forward-looking approach was through its Innovation Hub.

“The Innovation Hub is designed to make it quicker and easier for innovative start-ups and fintech businesses to navigate the regulatory system we administer,” he said, adding this dovetailed with the regulator’s commitment to cutting unnecessary red tape and generally facilitating business.

Further, the Innovation Hub incorporated five key components including engagement, streamlining, access, coordination and an established Digital Finance Advisory Committee (DFAC).

“ASIC will engage with other fintech initiatives, including physical hubs and co-working spaces that have been established for start-up businesses,” he said, pointing to Sydney-based Stone & Chalk as an example.

He said ASIC would streamline its approach to facilitating new business models and look at making itself more accessible to new types of business, pointing to a new portal on its website.

ASIC would also adopt a coordinated approach to how it applied reforms to innovative firms and had established the DFAC to advise on engagement.

DFAC, whose eight members have been drawn from initiatives such as Stone & Chalk, academia and the fintech sector and includes a representative with a strong consumer background, would meet for the first time early next month.

“We all have a common interest in seeing these opportunities harvested, while at the same time mitigating the risks, so that we all enjoy the benefits of investor and consumer trust and confidence in our markets, and sustainable growth,” he said.

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