The securities regulator has asked technology companies to come up with a more frictionless licensing experience, according to a senior ASIC representative.

The call out for tech companies to power a next generation licensing tool will be among the first projects to be funded by a $6 million budget ASIC has been allocated by the government specifically for new regulation technology.

Speaking with Professional Planner following the Accelerate Regtech event in Sydney on Wednesday, Cuihua Cartwright, a senior adviser at ASIC’s Innovation Hub, highlighted that advisers looking to become self-licensed would be among the beneficiaries.

Self-licensing has become entrenched in the Australian financial advice landscape. In March last year, a Professional Planner poll revealed almost half of all firms were independent or intend to be.

Cartwright confirmed ASIC’s Innovation Hub was about to go to tender for a third-party technology provider to come up with a tool to provide some of the systems to advise on licensing requirements.

“It may come in the form of a chatbot or a natural language processing or so on,” Cartwright said.

“It’s going to be for all licensed applicants to assist licensing; that could include financial advisers if they want to find licencing guidance,” she said.

Cuihua explained that while the current regulatory guide was serviceable, they were hoping that a provider could develop technology to make it “more user friendly and accessible”.

She said the initiative was not in response to any negative feedback about the current Australian Financial Services licensing kit, which includes three regulatory guides, a sample application and a eLicensing helpline.

“It’s come generally from ASIC’s effort to better communicate our regulatory guide using technology,” Cartwright said. “We’re hoping it will be useable for the industry.”

Dry powder

The corporate regulator’s $6 million regtech fund is part of an extra $70 million dollar purse the government allocated to ASIC in August to increase its monitoring and surveillance capabilities.

“ASIC believes Australia can position itself as a world leader in development, and adoption, of regtech solutions,” ASIC chair James Shipton said in May.

The extra funding is on top of the $320 million funding ASIC received last year, as per the budget.

Cartwright explained two other projects the regulator first announced in their December Regtech Liaison Forum; a financial advice problem-solving event, whereby participants use an ASIC dataset and “demonstrate potential solutions to improve detection of problematic financial advice”, and a voice analytics initiative to show life insurance firms how software can help them improve their “communication and conduct”, especially in the areas of phone calls.

The problem-solving event, she said, will be an exercise in “using artificial intelligence to monitor the quality of financial advice”.

Cartwright acknowledged the difficulty for ASIC in being both a regulator and a promoter of innovation, calling it a “fine balance” and saying a “collaborative approach” was required.

“This is a journey for us as well,” she said. “We are not naturally good at technology.”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
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