ASIC has this week released its Strategic Outlook paper, a new initiative which sets out what it sees as its key challenges in 2014-2015. Among these key challenges is the important and reoccurring theme of ‘digital disruption’ in the context of the Australia’s financial services industry and financial markets.
ASIC has identified that “[t]raditional business models in financial services and markets are being disrupted by new digital strategies at an accelerating pace.” Examples of such disruption include:
- crowd-funding and peer-to-peer lending platforms which are disrupting the traditional ways of accessing capital;
- electronic payment products such as online payment facilities and contactless card payment; and
- digital currencies such as BitCoin which continues to test regulatory boundaries.
ASIC expects continuing developments to create additional opportunities for digital disruption, including:
- further advances and take-up in the use of mobile technology for financial transactions, online investment advice and peer-to-peer platforms that connect investors and businesses seeking finance;
- increased use of ‘big data’ by financial service providers to customise their marketing; and
- increased opportunities to engage and empower consumers through interactive data innovations, such as calculators and product comparison tools.
ASIC has noted that it will continue to develop tools and technology to detect improper conduct, including implementing more of their Flexible Advanced Surveillance Technologies program. Further, ASIC will monitor technology innovation and product developments to increase its understanding of how its stakeholders are adopting new technologies. For example, ASIC will monitor emerging promotional methods, delivery channels and business models, like Facebook or Twitter for comparison websites.
Norton Rose Fulbright is already at the forefront of advising clients in respect of digital disruption in the financial services space. We have advised clients in relation to the movement towards crowd-funding platform structures, digital currencies and the utilisation of mobile technology to better reach and service clients.