The Australian financial industry must keep up with market changes and demands to continue providing excellent customer service.
In a speech to the ISDA/AFMA Forum on June 20, Australian Securities & Investments Commission (ASIC) chair Joe Longo outlined how financial organisations can help the industry evolve while retaining integrity.
Longo emphasised that the industry needs to balance commercial and regulatory settings to ensure integrity and confidence in the system and support the efficient functioning of financial markets.
“This is particularly important in times of volatility. But we can only have confidence and integrity when all of us – the regulators and the industry – work together to create the circumstances that foster and support confidence and integrity,” he said.
Transparency is one of the three factors supporting a robust market with integrity, with the other two being fairness and orderliness, according to Longo.
“Market transparency includes transparency to ASIC via over-the-counter (OTC) derivative transaction reporting – a critically important element in identifying risk build ups in the financial system and what each firm's exposures are,” he said.
Longo encouraged organisations to be more transparent with ASIC, including concerns or issues arising in their business or in the markets. Additionally, he reminded domestic and international regulators about their responsibilities for coordinating and sharing information.
“Of course, there is more work for regulators – both domestic and international – in relation to coordinating and sharing information. These are, after all, global markets. It is only natural that international alignment is an important part of the process,” he said.
ASIC expects AI to continue making risk management and operations more efficient, including in price prediction, hedging, and fraud detection.
Longo said ASIC will remain focused on the safety and integrity of the financial ecosystem.
“As with any new technology, to the extent that AI affects that ecosystem, to that extent we will be involved. As we realise the potential of tech, we have to do all we can to avoid negative disruption, learned market abuse, misinformation, discrimination, and bias – whether intended or unintended,” he said.
