ASIC flags stronger fintech collaboration

ASIC chair Joe Longo has signalled a more collaborative and innovation focused regulatory approach as artificial intelligence (AI), tokenisation and digital assets rapidly transform Australia's financial service sector.

Speaking at the Tech Council of Australia's Future of Innovation in Australia's Financial Markets event in Sydney, Longo said ASIC was actively considering ways to improve its regulatory sandbox framework to help start-ups and emerging fintech businesses navigate licensing requirements with greater certainty.

"The way to do this is we need to work with Treasury, other regulators and the industry to get a good result," Longo said, adding that ASIC wanted businesses to move "from innovation to licensing in a more confident way".

Longo acknowledged navigating regulatory grey areas remained difficult for early-stage businesses, particularly as emerging technologies evolve faster than frameworks.

"One specific idea that I've actually mentioned publicly... is to be able to say to a start-up or an entity that has an idea and give them a person at the regulator that they can deal with throughout the journey," he said.

"I think that would give start-ups confidence... and on the ASIC side... there's someone who understands that business and who's trying to deliver agency to it," said Longo.

The discussion highlighted growing pressure on regulators and financial institutions alike to balance innovation with consumer protection and operational resilience.

Commonwealth Bank of Australia group executive Stuart Munro described the current pace of technological development as "an exceptional moment in history", pointing to the explosive adoption of generative AI globally.

"If you look at... Anthropic, for example... from December 23 to December 25, they grew 100x," said Munro.

"We've never seen growth that fast before of companies that sort of size and scale," he said.

Munro noted financial services had become one of the largest adopters of AI technologies outside the technology sector itself, while regulatory clarity around stablecoins and digital assets was also beginning to improve globally.

Meanwhile, payments infrastructure firm Zepto highlighted the operational burden facing fintech challengers attempting to innovate in heavily regulated markets.

Zepto chief business resilience officer Mariana Paun said Zepto spent seven months approximately $1.5 million building foundational security and governance systems before launching products.

"For us, a sandbox, for example would have been quite important because we have to make that investment even before we got any certainty on the product," Paun said.

Longo stressed that trust would ultimately determine whether emerging technologies succeed commercially.

"It's not good enough if the products are brilliant and amazing if people don't trust them," he said.

"So, we want to move fast but we've got to move in a way that brings people along and builds trust," Longo said.