ASIC has released research on financial technology and regulatory technology in Australia, finding the country is well placed to benefit from continued innovation in the financial system.
Conducted by the Digital Finance Cooperative Research Centre for the corporate regulator, the study examines how fintech and regtech are evolving globally. It finds artificial intelligence is becoming part of routine financial operations, including credit underwriting, claims processing, portfolio management and disclosure.
The findings come as ASIC sharpens its focus on responsible innovation and reviews how regulation should respond to structural change across the finance sector. The work will inform its engagement with industry through the Digital Finance Advisory Panel and targeted roundtables.
ASIC Chair Joe Longo said Australia had a long record of turning ideas into commercial and social outcomes, including in finance.
"Australia has long been a laboratory for innovation, gifting the world groundbreaking technologies from wi-fi to the cochlear implant. The same spirit exists in our financial system. For example, Australia is a global leader in some areas, including its world-class payments infrastructure and pioneering buy now pay later sector," Longo said.
ASIC placed the report in the context of broader improvement in Australia's startup funding environment. In 2025, Australian startups raised more than $5 billion in venture capital, which it described as the third-best year on record and almost 50% higher than in 2018.
It also cited data indicating that Australia has produced 1.22 unicorns per US$1 billion in venture capital invested since 2000. According to the figures, that ratio is higher than in any other country and almost double the level recorded in the United States.
Policy focus
ASIC said innovation could lift productivity in the financial system, support economic growth and improve consumer experiences, while stressing the need for safeguards.
"ASIC has often said we want to identify opportunities to back innovation in Australia, and it is clear that innovation can significantly improve productivity in our financial system, boost Australia's economy and lead to better consumer experiences," Longo said.
He said oversight must keep pace with technical change and the wider adoption of new tools.
"As a regulator, ASIC's role is to make sure that when innovation happens, it happens safely and responsibly, with the wellbeing of end consumers at the forefront of everyone's minds. Good regulation is good for consumers - and good for business," Longo said.
One response will be continued work on regulatory simplification, which ASIC argues can reduce friction for firms without weakening standards.
"That's why ASIC will continue to prioritise simple, principles-based regulation through our regulatory simplification initiative. We will continue to engage with industry to strike the right balance between protecting consumers, bolstering market integrity and promoting innovation," Longo said.
Innovation hub
Support for new firms remains a core part of that approach. Since 2015, ASIC's Innovation Hub has offered informal help to fintech and regtech businesses seeking to understand regulatory obligations and licensing requirements.
The hub also administers the Enhanced Regulatory Sandbox, which provides eligible fintech firms with a limited licensing exemption to test certain business models. ASIC also uses the platform to share information and work with industry and peer regulators in Australia and overseas.
In late 2025, Longo said ASIC would review and relaunch the Innovation Hub with a stronger focus on supporting financial market innovation in Australia. The review was completed in March 2026 and identified areas for improvement, as well as areas where the regulator would take the lead in responding to system-wide change.
The new research also sits alongside other work on digital finance. In March 2026, the Digital Finance Cooperative Research Centre published a separate report on the potential economic impact of digital finance innovation in Australia.
ASIC has also been involved in Project Acacia, a joint effort with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre examining digital money in wholesale tokenised asset markets. It continues to work with the central bank and other agencies on follow-up work linked to that project.
ASIC's message is that Australia starts from a position of relative strength, but that advantage will depend on how industry and regulators manage the next phase of change.