Key points
- ASIC is committed to making our financial system fair and safe for all Australians.
- Our strategic priorities reflect emerging issues in our operating environment that put consumers, investors, and the financial system at greatest risk.
- All regulators face difficult choices about which problems to prioritise.
Good afternoon.
Let me begin by acknowledging the Traditional Owners of the land on which we meet today, the Gadigal people of the Eora nation, and paying my respects to Elders past and present.
I’d like to thank FINSIA for the opportunity to be here today to discuss ASIC’s strategic priorities. We recognise the important role that you play in working to enhance the professionalism of Australia’s financial services sector.
I would also like to recognise my fellow regulators speaking today. One of the things that has struck me since joining ASIC is the amount of effort we all put into ensuring that our work is aligned where appropriate.
I think Australians – and New Zealanders for that matter – can feel confident that we are working together to solve the big problems in our financial system.
I’m going to spend the next few minutes talking about problems, because in one sense, one of the key challenges we all face as regulators is choosing which problems to prioritise in our work.
As Australia’s integrated corporate, markets, financial services, and consumer credit regulator, we cover a lot of ground at ASIC, so perhaps unsurprisingly, there’s no shortage of problems that come across our desks.
Problems are, however, an opportunity for change and improvement – and that’s why they play a key role in our process of setting strategic priorities.
How we prioritise
In identifying the most important problems for ASIC to focus on – those that that put consumers, investors, and the financial system at greatest risk – we start with the data.
We analyse all the complaints, intelligence, and reports that come through to us – including more than 11,000 reports of misconduct that we finalised from the public last financial year[1].
But just as importantly, we talk to other regulators – including the ones you’ll hear from today – as well as industry bodies, consumer advocates, and experts involved in our various consultative panels.
We then consider this intelligence against the key trends in our regulatory environment.
The problems we’re seeing
So, what are some of the key trends we’re looking at?
The first is the financial pressure that many Australians have faced in recent years.
Higher inflation, higher interest rates, and higher rental prices have strained household budgets.
While there are signs that some of these pressures may be easing[2], many Australians have been doing it tough - and when they have asked for help, they have not always been heard.
Complaints to AFCA are at a record high[3], including complaints about financial hardship assistance.
Our own surveillance into home lenders’ responses to people in financial hardship found some lenders’ processes were so difficult that one in three Australians dropped out at least once[4].
We are also conscious that some people see this economic environment as a business opportunity, so we are particularly interested in the emergence of business models that seek to avoid consumer credit laws, or purport to help people to manage their debts.
On top of this, we’re also seeing the effects of climate change across our financial system.
Around eight in 10 Australians have experienced a natural disaster since 2019[5], and according to the Actuaries Institute, 1.6 million households are now experiencing insurance affordability stress[6] – where insurance premiums cost more than four weeks’ of gross household income.
As we face more frequent and more severe extreme weather events, the high number of Australians making insurance claims has already exposed cracks in the system - as our recent work on claims handling shows[7]. Insurers increasingly need to be ready to respond to spikes in claims as business as usual – rather than treating them as extraordinary events.
Meanwhile, new technologies are changing the ways in which consumers navigate financial services markets.
Artificial intelligence use is accelerating, and changes in payments technology mean that money moves through – and sometimes out of – our financial system much more rapidly.
These developments create both opportunities and risks for consumers.
For example, scammers used technology to steal $2.7 billion from Australians last year[8].
While we have made a significant dent in this through the National Anti-Scam Centre, and ASIC’s work to take down investment scam websites, the international criminal groups that are behind the most serious scam activity continue to find new ways to rip off Australians, including by washing funds through cryptocurrency exchanges[9].
How we’re tackling them
What this creates is an environment where consumers are at an increased risk of poor outcomes.
In response, we have developed five strategic priorities for 2024-25:
- To improve consumer outcomes – which includes our work on financial hardship and credit issues
- To address financial system climate change risk – which includes our continued interest in how insurers are handling claims after major events
- To pursue better retirement outcomes and member services – which is not limited to our work on member services in super; it also includes work on models of financial advice that result in erosion of superannuation
- To advance digital and data resilience and safety – which includes our work on the use of AI by licensees and disruption of investment scams, and
- To drive consistency and transparency across markets and products – which includes the work we are doing to understand changes in public and private markets.
I hope to get an opportunity to speak in more depth about some of the actions we are taking under these priorities in our panel discussion later, but I would note that it’s no accident that improving consumer outcomes is first and foremost among them.
Consumer protection is in our DNA at ASIC, and we are committed to making our financial system fair and safe for all Australians. That’s not only reflected in our forward-looking strategic priorities – it’s also reflected in our strong track record of enforcement outcomes in recent years.
And I hope that focus strikes a chord with many in the room today, because high standards of professional practice are surely ultimately about producing good outcomes for your customers.
[1] ASIC Annual Report 2023-24
[2] Consumer Price Index, Australia, September Quarter 2024 | Australian Bureau of Statistics
[3] AFCA Annual Review shows record complaints, signs of downturn in scams | Australian Financial Complaints Authority (AFCA)
[4] REP 783 Hardship, hard to get help: Lenders fall short in financial hardship support
[5] Survey results: National study of the impact of climate-fuelled disasters on the mental health of Australians | Climate Council
[6] Home Insurance Affordability and Home Loans at Risk | Actuaries Institute
[7] REP 768 Navigating the storm: ASIC's review of home insurance claims
[8] Scam losses decline, but more work to do as Australians lose $2.7 billion | ACCC
