Australia risks producing a "lost generation" of citizens stuck with a lower standard of living if the country fails to keep pace with global financial innovation, ASIC Chairman Joe Longo said today (Thursday), as the regulator published a landscape review mapping the country's standing against six major overseas jurisdictions.
The report, prepared by the Digital Finance Cooperative Research Centre, covers the United States, the United Kingdom, the European Union, Singapore, Hong Kong, Canada and Switzerland.
It concludes that AI is moving into routine financial operations worldwide, while financial services are being embedded inside non-financial digital platforms.
"Backers, Not Blockers" Is the New Stance
Longo used a Tech Council of Australia event in Sydney to push his case. He told attendees that Australia is "in a global innovation race" and that failing to act could mean Australians "could be poorer for it as a nation in the future." He repeated his framing that he wants ASIC to be "backers, not blockers" of financial innovation.
Industry engagement on parts of the agenda has been thin. Longo said roughly half the market declined to take part in or even meet with ASIC's recent tokenization survey, and only around a third provided detailed feedback.
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The pushback comes as ASIC ramps up enforcement, securing a record A$349.8 million in civil penalties in the second half of 2025.
Australia Leads on BNPL and Real-Time Payments
The DFCRC analysis places Australia in its "advanced" category in two areas.
Domestic buy-now-pay-later providers have been required to hold an Australian Credit License since June 2025, placing the country ahead of the UK, where the Financial Conduct Authority will only begin regulating BNPL from 15 July 2026, and alongside the European Union.
Around one-third of Australian adults have used instalment payment services, according to Reserve Bank of Australia data.
The New Payments Platform also drew favorable comparisons. More than 1.82 billion real-time payments, including Osko and PayTo transactions, were processed through the NPP in 2025.
Australian startups raised more than A$5 billion in venture capital last year, the country's third-best year on record, and produced 1.22 unicorns per US$1 billion of VC invested since 2000, almost twice the US ratio.
Lemonade, Square and Betterment Set the Global Pace
The gap widens in insurance, SME credit and digital wealth, where the DFCRC found Australia trailing the US, UK and Singapore.
Lemonade, the US insurtech founded in 2015, automated roughly 55% of its claims fully without human intervention as of December 2024, and 96% of first notices of loss were handled by its claims bot, according to the company's 2024 annual filing cited in the report. Simple claims settle in under three seconds.
In SME credit, Square Capital, now part of Block, had originated more than US$18 billion in cumulative working capital loans by mid-2025 based on merchant transaction data, with Shopify Capital, Amazon Lending and PayPal Working Capital running comparable models.
Betterment, the US robo-advisory platform, held roughly US$65 billion in assets under management by early 2025 and charges 0.25% annually, against the 1.0% to 1.5% typically charged by human advisers.
Longo said the technology could matter because Australian adviser numbers would need to more than double by 2055 to maintain current coverage.
EU and Singapore Set Different Templates for AI Governance
The competitive context cuts across regulatory style as much as technology. The European Union's AI Act, which classifies insurance pricing and credit risk assessment as high-risk applications, imposes documentation, testing and human oversight obligations on lenders and insurers using algorithmic underwriting.
The bloc's Digital Operational Resilience Act adds parallel rules on third-party tech dependencies.
Singapore has taken a different path through its Monetary Authority's Fairness, Ethics, Accountability and Transparency principles and the Veritas toolkit, which give firms practical assessment tools without prescriptive legislation.
The European Central Bank has separately warned about AI risk in finance, and Australian and New Zealand regulators have flagged AI-powered investment scams as a growing problem.
Open Finance and SupTech Are the Next Battlegrounds
The DFCRC identified four priorities for Australia: clearer guidance on how existing obligations apply to AI-driven decisions, tighter oversight of financial products sold inside non-financial digital journeys, expansion of the Consumer Data Right beyond banking and continued investment in ASIC's own SupTech capacity.
The push lands as Australia's parliament has already passed legislation requiring crypto exchanges and custody platforms to hold an AFSL, with penalties reaching up to 10% of turnover for non-compliance.
Longo said ASIC will keep working with the Reserve Bank of Australia on a potential digital financial market infrastructure sandbox. Further research on capital market innovation and tokenization is due in June.
