The rise of financial services technology businesses will revolutionise the advice industry, but also present a number of regulatory challenges, according to lawyer Claire Wivell Plater.
The Fold Legal's managing director said many of the regulatory obligations were modelled on manual operating methods and now need to be modified for the digital environment.
“We are providing regulatory advice to a number of exciting and creative [financial technology] providers on how they can work within the existing regulatory obligations,” Ms Wivell Plater said.
“ASIC is aware of the need for regulation to keep pace with innovation and early indications are that it will facilitate relief from regulation to [financial technology] businesses where necessary in order to help make that happen,” she said.
Ms Wivell Plater also said financial technology businesses need to be aware of whether they require a licence for the service that they are providing.
“They need to understand what services require a licence and understand the regulatory obligations that flow from that, whether it be disclosure or other mandated conduct requirements,” Ms Wivell Plater said.
“Then it is a matter of mapping the process and the end client’s experience; analysing and understanding where the existing law fits; meeting it as much as possible, and if it’s not possible, consider approaching ASIC for relief,” she said.
Ms Wivell Plater said financial technology solutions such as ‘robo advisers’, which automate investment selection and client advice, have the capacity to greatly improve financial advice business efficiencies.
“The future of [financial technology] really is now, and given the cost-effective efficiencies these initiatives will offer financial services businesses, the industry should welcome the developments with open arms,” Ms Wivell Plater said.
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