ASIC and APRA chairs Joe Longo and Wayne Byres have discussed their bodies’ efforts in narrowing regulatory hurdles for businesses, during a panel session at the recent Australian Banking Association (ABA) Banking Conference.
Mr Byres commented that the banking system had been resilient in the face of the influx of regulatory changes thrown at it in recent years. But, the reforms had consequences.
“We absolutely have a strong system. But what all of that reform has, unfortunately produced and many people in this room know this very well, is a rather large and unwieldy rulebook,” he said.
One of the tasks APRA has set for itself, is re-examining its prudential framework and to consider where it could improve. It will involve digitising the framework.
“It’s big, it’s cumbersome, maybe not as big as the Corps Act or something like that, but nonetheless, not easy to navigate, not easy to find regulatory requirements, not easy to map regulatory requirements,” Mr Byres said.
“So can we step back and have a look at it? Can we make can we streamline it? Can we make it easy to understand and navigate? Can we easily make it easier for us and financial institutions to update, understand what they have to do, and make it easier to adapt as new things come along?
“That’s an ambitious task, it’ll be a multi-year task, but I think there’s plenty of scope.”
He added the regulator will need to consult with the businesses it polices, about how “fast and ambitious” it should be in cutting down regulatory burdens.
“We very much hear the complaints about regulatory burden, we very much hear the complaints about the complexity of the regulatory system. But to change that does involve time and effort and resources and cost,” he said.
“And there’s a trade-off to be had there about how quickly we can remove some of that burden. It will involve effort, cost on the industry to harness those benefits we think we can deliver but we’re absolutely determined that the project is delivering benefits to the industry.”
In September, ASIC indicated that it had established a new unit focused on cutting regulatory costs for businesses and on improving its efficiency.
Mr Longo reported that the division has since been in discussions with industry associations, practitioners and others in the market.
The chair wants his body to improve its engagement with industry, commenting its current mechanisms, where it publishes policy and follows various processes have “room for improvement”.
The body is also in the middle of a data and transformation strategy, with Mr Longo pointing to efforts in breach reporting.
“For example, in breach reporting, we’ve been working with the ABA to streamline the way we receive breaches, breach reports, and then what we do with them when we do receive them,” he said.
ASIC will publish its insights from breach reporting in November. The regulatory efficiency unit will be required to take feedback on how useful the data is for the banking industry.
Mr Longo added that he is “very concerned about the complexity” of financial services legislation and looking for ways to reduce frictions for business and for ASIC to become more effective.
“In the end, I think we can all accept that the corporations legislation is very complex. It affects everybody,” he said.
Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.