The corporate regulator will be looking more closely at how to harness data to provide greater transparency around the actual consumer outcomes of financial services and products.
In a speech at an industry event, ASIC deputy chair Peter Kell said more public data on the outcomes for consumers regarding financial services and products had the “potential to be a game changer”.
“One of the key sources of community and consumer frustration with the financial services sector is the divergence between what is promised and what is delivered over time.
“If we can improve transparency around outcomes, this will help with accountability and trust,” Mr Kell said.
Presently, disclosure around a service or product tended to centre around the “‘promise’ without sufficient information being available about actual outcomes”.
Mr Kell argued that this has so far been unsuccessful, or at least insufficient, in a number of aspects, with current disclosure of conflicts of interest not resulting in better conduct.
“Rather, we need more readily available, industry-wide data on how products and services have actually performed, not just what they promise!” Mr Kell said.
“This is not just investment returns, but [with] issues such as how complaints are dealt with.”
He argued that this data should be recurrent, not a one-off, in order to detect trends that might emerge over time that would end up benefitting the regulator, the industry and other stakeholders as well as consumers.
Consequently, ASIC has been exploring data analytics in order to better identify and respond to risks for better consumer outcomes, the deputy chair announced.
“This program of data collection could deliver net benefits for all parties through, for example, cost-effective recurrent collection and reduced need for expensive bespoke data requests.
“Ultimately a major benefit will come from greater consumer and community understanding and trust.”
Mr Kell also noted that there would be some “unavoidable” cost associated with more data collection.
“We acknowledge that recurrent data collection will have a cost impact on industry. ASIC will work with industry and others to manage this impact.”
The deputy chair indicated that two data collection pilots relating to mortgage and managed fund flow data have been proposed to begin in 2018.
In these pilots, the regulator will be looking at data surrounding assets under management in a scheme; inflows and outflows of the scheme; the number of investors in each scheme; and how many wraps or platforms are among those investors.