'Rules as code'

CSIRO, which operates a digital innovation arm known as Data61, has detailed to the committee how a "rules as code" approach could lift compliance with various laws.

It is working with PwC on a joint venture called PaidRight to check employees’ entitlements under enterprise bargaining agreements against what they have actually been paid.

The banking industry and CSIRO are working on a project to develop a digital approach to organising climate change disclosure, which CSIRO said could be "a first step towards a nationally coordinated framework for delivery of climate information".

The agency is also working with the building and construction industry to automatically check Computer Aided Design (CAD) models of buildings against the many building and construction regulations from the federal and state governments.

Publishing machine-interpretable rules alongside the text of legislation would "provide critical support for the regtech industry and potentially significant productivity benefits for regulated industries in Australia," CSIRO said.

The Australian Banking Association called on the committee, which is being chaired by Liberal Senator Andrew Bragg, to recommend that Treasury "be explicitly tasked with responsibility for a growth strategy for regtech".

Design box thinking


The RegTech Association, which represents 110 start-ups and corporates, suggested the committee call for the creation of a COAG-style forum to introduce government departments to regtech, and is encouraging government to become an "influencer, buyer, beneficiary and investor" in the space.

In its submission, the association suggests a percentage of regulatory fines paid by banks could be invested in a new 'patient capital' investment fund to invest in the sector, modelled on the Australian Medical Research Future Fund. It also reckons a safe harbour, or relief program, could be created to provide reporting entities attempting to deploy regtech with more confidence to adopt changes, via amendments to ASIC's regulatory guidance.

The association also wants government to create "design box" or "sandbox" programs to accelerate testing of new technologies. It pointed to the APIX Platform, part of the ASEAN Financial Innovation Network and backed by the Monetary Authority of Singapore, which has created a marketplace for financial institutions to exchange ideas with fintechs on better ways of doing things.

"Australia could easily replicate this idea of a digital marketplace or partner to introduce a similar platform," the association said.

"It could allow buyers and sellers to come together to experiment more easily, allow greater visibility over regtech solutions, help regtechs understand the current problem statements of their potential clients, and allow a ‘design box’ where negative assurance could be provided by regulators as observers. Over time the digital marketplace could also be a portal for talent and skill recruitment."

Separately, CSIRO responded to an accusation in the submission by FinTech Australia to the inquiry which criticised Data61 for "competing directly with private enterprise for government and non-government work". In a statement, CSIRO said it "does not seek to compete with the private sector or start-ups and where possible aims to partner with Australian organisations, to support their growth.

"Like many of CSIRO’s business units, projects for Data61, the digital innovation arm of CSIRO, are typically identified as a result of discussions with, or approaches from government, industry or academic partners, where an opportunity has been identified for our research to be applied to solve problems and create benefits for Australia."