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Regtech Environment in Australia

by Leica Ison

Opinion Piece in SmartCompany by CEO Leica Ison

From the stump-jump plough and the black box flight recorder, to Cochlear implants and Wi-Fi — Australians have a remarkable record in innovation. 

But we are in danger of losing our status if our laws and policy settings do not keep pace with the speed of digital innovation.  

The Australian government has a significant opportunity to do more to bolster its policies, processes and funding models so they can support digital innovations.  

I point to a quote from the new member for Wentworth, Dave Sharma, who captured the fundamental issues we face in this space in his first speech to Parliament on 24 July 2019 

“In 1967, the largest US companies by market capitalisation — and the main drivers of US prosperity — were General Motors, Standard Oil, Kodak, AT&T and IBM. Fifty years later, the top ranks of the Dow Jones index are dominated by technology companies: Apple, Alphabet, Microsoft, Facebook and Amazon.

“These companies are about data rather than goods, services rather than products, and spaces rather than places. A quick glance at the ASX20 suggests we’re yet to make this transition.  

“We have a lot of good companies which employ technology in their operations; we don’t yet have a lot of good technology companies.

“In Australia, we have a highly skilled workforce, we have great research institutions and universities, and we have deep and sophisticated capital markets…it’s about capturing the jobs of the future, in areas such as quantum computing, cyber, artificial intelligence, space, clean energy, defence technology and automation.

“The nature of value creation is changing, and the Australian economy needs to keep up.”

Read the rest of the article here.

 

What is Regtech

Regtech is the use of technology to manage and facilitate the delivery of regulatory compliance. The main function of Regtech is to enable organisations to build customer trust in their products, where the base line for that trust is meeting regulatory obligations.  At a practical level it includes  areas like regulatory monitoring, data management and compliance reporting.  The shift in dynamics to transparency, trust, product governance and cost of non-compliance ramped-up significantly in the past year.

Regtech applies to physical or knowledge-based product and service organisations that operate in a regulated environment. The definition of Regtech consumes Fintech within the Regtech emerging business scope, which is focused wider than financial services.  Regtech covers many products and service-based Australian and global organisations including telecom, energy, technology, manufacturing, healthcare, consumer goods and agriculture.  These organisations create and manage their products and services as a knowledge management function called ‘product lifecycle management’.

 

Regtech and DDO (Design and Distribution Obligations)

A tightened regulatory environment has led to an increase in compliance requirements. In this context, organisations are actively looking for solutions that help them reduce the risk of non-compliance.

Regtech has gained prominence following the Design and Distribution Obligations (DDO) and Product Intervention Powers (PIP) legislation that was passed on 3 April 2019. This regulation aimed to help consumers obtain appropriate financial products by requiring issuers and distributors to have a customer-centric approach to designing, distributing and post-sale governance of their products.

In the case of the Design and Distribution Obligations, the legislation provides the opportunity for product teams to refine their product governance in the day to day operations of the organisation. Companies are using Skyjed for setting their target market statement, product monitoring and review capability across a product lifecycle and to simplify compliance.

Getting product lifecycle management right is critical to success. If you want to find out how Skyjed can help improve compliance and strengthen your product with our AI driven platform, feel free to get in touch.

Topics:Product Governancedesign and distribution obligations