ASIC backs Australia's fintech edge as AI reshapes financial services

The Australian Securities and Investments Commission (ASIC) believes Australia is well placed to capitalise on accelerating financial innovation, as artificial intelligence (AI), digital finance and regulatory technology become increasingly embed across the financial system.

New research commissioned by ASIC and conducted by the Digital Finance Cooperative Research Centre found fintech and regtech innovation is reshaping global financial markets, with AI now being integrated into functions including credit underwriting, claims processing, portfolio management and disclosure.

ASIC chair Joe Longo said Australia's financial system had a long history of innovation and remained globally competitive in areas such as payments infrastructure and buy now pay later services.

"As the pace of chang accelerates, industry and regulators will need to work together to ensure that Australia not only keeps up but stays ahead," Longo said.

The report forms part of ASIC's broader push to support responsible innovation while maintaining consumer protections and market integrity, as regulators globally grapple with the rapid adoption of AI and digital finance technologies.

Longo said innovation had the potential to improve productivity across the financial system, strengthen economic growth and improve consumer outcomes, but warned innovation must occur "safely and responsibly".

ASIC said its regulatory simplification agenda would remain central to balancing innovation with oversight, with the regulation and industry engagement through initiative including its ASIC Innovation Hub and Digital Finance Advisory Panel.

The findings come as Australia's startup ecosystem continues to attract growing investor attention. According to ASIC, Australian startups raised more than $5 million in venture capital funding in 2025, making it the country's third strongest year on record a placing Australia behind only France and Germany in growth since 2018.

ASIC also highlighted Australia's strong track record in producing unicorn companies relative to venture capital investment levels.

The regulator said the research would help inform future engagement with industry and ongoing work around structural changes reshaping financial markets, including digital assets and tokenised finance.