Artificial intelligence (AI) may soon assist financial regulators in combating criminals. The Australian Securities and Investments Commission (ASIC) has announced plans to escalate its enforcement activities aimed at protecting consumers and small businesses. This comes in response to a growing prevalence of scams, digitally-enabled misconduct, and predatory lending practices in Australia. In addition, the regulatory body has presented a new Corporate Plan.

ASIC to Fight Increasing Number of Scams

ASIC's Chairman, Joe Longo unveiled the organization's latest Corporate Plan, emphasizing that the past year has been one of progress against strategic priorities.

"We have made significant strides since the release of our strategic priorities last year, but there is still more work ahead," Longo commented. The plan focuses on key trends and emerging issues in the regulatory landscape, including shifts in sustainable finance, the digital and data economy, and the challenges posed by an ageing population.

ASIC 's core priorities in the newest four-year plan include:

• Strengthening enforcement actions
• Monitoring critical trends in sustainable finance and the digital economy
• Streamlining decision-making and operational processes

ASIC has a track record of robust enforcement actions. Over the past three years leading up to June 2023, the agency initiated more than 125 criminal actions, resulting in 92 criminal convictions and 39 custodial sentences.

Additionally, nearly 200 civil actions were commenced, leading to over 130 successful civil claims. Courts have also imposed more than $500 million in criminal and civil penalties during this period.

AI to Help

Longo highlighted the organization's interest in developing and applying artificial intelligence.

"We are closely monitoring how artificial intelligence impacts the businesses and markets we regulate, and we are exploring its potential uses within ASIC," Longo added.

The new organizational structure, implemented in July, aims to enhance ASIC's ability to respond to emerging threats and challenges. A key focus is to streamline decision-making processes and increase operational flexibility.

"Protecting consumers and small businesses from misconduct is central to our work," Longo concluded. "Our actions are designed to maintain confidence in Australia's markets and support the economy."

The growing issue of investment fraud in Australia, which is draining over $1 billion from its citizens annually, has prompted the formation of the first fusion cell by the National Anti-Scam Centre. The Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) will co-manage this new effort.

Important Regulatory Updates

Two weeks ago, foreign financial services providers (FFSPs) were granted an extension for the transitional relief period. Initially expected to expire in March 2024, the new deadline has been moved to March 31, 2025. This gives these organizations additional time to acquire an Australian financial services (AFS) license for their dealings with wholesale clients in Australia.

Simultaneously, the market oversight body issued a new report focusing on optimal practices for whistleblowers. The aim is to motivate individuals to reveal vital information that could assist in detecting illegal activities in the financial markets.