ASIC's transformation journey into becoming a data driven regulator
Updated: Jun 19, 2019
Data does not distinguish! Be it a regulator or regulated entity – both sides of the table are facing their own data challenges and opportunities. And therefore, the Australian Securities and Investments Commission (ASIC), has developed its own data strategy to transform itself into a data-led regulator.
Although its data strategy has been announced nearly 18 months ago, it has recently received renewed focus off the back of the outcome of the Royal Commision and IMF's Financial System Stability Assessment (FSAP) highlighting that the data collection and analysis capabilities of our regulators are not up to scratch with their global peers.
Recently, ASIC also turned its focus towards piloting a (transaction level) recurring data collection program with volunteering financial institutions (FIs). The program acts as a precursor to ASIC’s plans of collecting mortgage as well as managed funds data from the industry players on a periodic basis. The program will help ASIC expand its regulatory oversight from (mere) reports submissions to collection & analysis of transaction level data.
With the flurry of data coming ASIC’s way, it makes sense for the regulator to level-up its data expertise. And hence, in its data strategy circular, ASIC outlined its intended ways & means to capture, share & use data to achieve better regulatory outcomes in the financial industry.
Below is a snapshot demonstrating a series of initiatives being undertaken by ASIC to overhaul its data management and analytics capabilities.
The Corporate Regulator’s principle-based data strategy, referred to as ‘Data Strategy 2017–20’ forms an integral part of its overall regulatory transformation program ‘One ASIC’.
The strategic program largely comprises key activities aimed at improving ASIC’s data collection, management and governance processes while also focusing on cutting red tape to make interaction with ASIC faster and easier.
ONE ASIC – Regulatory Transformation Program
‘One ASIC’ primarily focuses on connecting the dots within three key areas:
1) People – enhance skills of staff in technology & analytics field while also focus on enhancing cross function collaboration, productivity, flexibility and usage of common language, systems and processes.
2) Process & Technology – implement one IT solution for internal & external regulatory data to further optimized value derivation processed. ASIC is also aiming to use distributed ledger (blockchain) technology to receive and access data in future.
3) Culture & Governance – imbibe the ‘One ASIC’ approach across functions with the help of common ways of governing processes, technology & data and standardization of performance measures and outcomes.
ASIC DATA STRATEGY 2017-20
The ASIC’s data strategy is part of ‘ONE ASIC’ program and is anticipated to further its efforts towards seamless sharing of data & insights by adopting common language, systems and processes within and outside the institution. The strategy has been envisaged to help ASIC become “more data-driven and intelligence-led in the future”. Following on the guidelines originally prescribed in Productivity Commission (PC) report, ASIC has also committed to review and publish updates on its strategy implementation on an annual basis.
ASIC is also conscious of the additional efforts required at the end of supervised entities to conform with regulators’ ever expanding data submission requirements and therefore, plans on doing extensive groundwork beforehand to determine the data it requires for regulatory purposes.
The ASIC data strategy mainly revolves around its (data) ‘Capture, Share & Use’ approach which essentially dictates the best practices to be followed to:
Capture – how data will be brought-in
Share – how data will be shared within & outside ASIC (nationally & internationally)
Use – how data will be used in enforcing laws and shaping regulatory policies. The approach towards usage of data will further support ASIC in its supervisory role by:
detecting (likely) misconducts in the industry
understanding higher risk areas & trends with the help of collected data
responding with actions and continual improvement approach
While the ‘Capture, Share & Use’ approach is an outward looking approach, ASIC also aims at enhancing its internal data strengths in all areas by employing world-class:
data management practices to treat data as an asset and is well catalogued, fit-for-purpose and of utmost quality
data and information governance framework surrounding capturing, sharing & usage of data which would be overseen by data governance council and digital governance board
national and international data liaison capability to share insights and work with stakeholders at a broader scale
cyber security and data privacy expertise that fully complies with Australian government data security and privacy laws.
With data being a core theme in the current ‘age of knowledge’, ASIC is leading the way by example for the financial industry to follow suit and implement data strategies that will not only help them comply with laws & regulations but will also propel their business upwards with the support of data analytics & insights.
ASIC's CDO John Wallace provides additional context to their strategy in the following Podcast.
Are you embarking on your data transformation journey or looking to understand industry best practice around data management, data quality, data governance or data strategies? Please get in touch and we will be happy to share our experience over coffee.