Topics: IT Services; Software; ICT Strategy; Data Analytics; Digital Transformation; Fed.
Predictive data analytics, an integrated platform, and the appointment of a Chief Data Officer are planned for the Australian Securities and Investment Commission (ASIC), following the arrival of much-needed funding in the recent federal budget to improve its technology systems.
Prompted by the increasing complexity of the financial services industry, the new capabilities will help ASIC address the regulatory challenges associated with the rise of big data, according to the Corporate Plan 2016-17 to 2019-20.
“The increasing use of technology for financial decisions and transactions means financial firms and regulators alike need to ensure innovations in distribution and marketing enhance, rather than undermine, investor and consumer decisions and outcomes.”
“Testing and monitoring is key to understanding the benefits and risks of innovation.”
ASIC will develop its predictive data analytics capabilities to better identify and monitor firms with a high risk of non-compliance. The agency will also enhance existing capabilities, including the market surveillance system (MAI) and investigation and evidence management system (EIA).
The MAI is currently supplied by First Derivatives under $16.2 million contract, but is due to expire in June 2017. The contract is the largest to be signed at the agency since 2005-06, according to Intermedium’s Analyse IT tool. The EIA is held by Remasys under a managed service contract worth $212,214 over three years, and is due to expire in June 2018.
Updating both systems will assist ASIC improve trade data analysis, create better event chronologies and identify connections across datasets. The systems will also help gather data about the cyber risk management practises of entities, in line with the 2016 Cyber Security Strategy, which aims “to better understand the costs of malicious cyber activity to the Australian economy.”
These capabilities will be supported by a new data analytics team overseen by a Chief Data Officer, the establishment of a new Data Governance Council, and a new inter-agency group to share resources and approaches to building analytical skills and capabilities.
ASIC will also build an integrated platform to contain digitised portals and forms that are aligned with the Government’s digital transformation agenda, as well as a single repository of regulatory information, allowing ASIC the flexibility to accommodate its future needs.
The planned improvements address a number of the 34 recommendations made in ASIC’s Capability Review, Fit for the Future: A Capability Review of ASIC. The Review identified a range of ICT weaknesses including a reliance on legacy infrastructure, no integrated operating platform, limited data digitisation and in-house built/maintained data architecture, siloed databases and data search inefficiencies, and a lack of progress on big data capabilities in comparison to peers.
“ASIC seems to have been slower to recognise the importance of data analytics and innovation than organisations such as the ATO and RBA but is now trying to catch up. These regulators’ investment in better data management and analytics is ahead of ASIC’s by a number of years,” the report states.
ASIC received $39.2 million in capital funding in the 2016-17 budget to improve its ICT systems over three years. The funding was part of the $61.1 million pledged in a reform package announced by Treasurer Scott Morrison to modernise the agency’s data management systems and improve data analytics and surveillance capabilities over four years.
ASIC was also allocated a small proportion of the $32.4 million in the 2015-16 budget for the development of an online portal for business and company registration, the publication of a new computer code to enable developers to build new registration software, and reducing the number of business identifiers.
ASIC has already begun the process of replacing its Early Case Assessment (ECA) Platform, which is currently supplied by Nuix under a five-year contract valued at $3.4 million. The replacement electronic document review platform will have the “flexibility to change and grow, reflecting the changing business needs of ASIC”, according to tender documents.
Intermedium revealed in May that ICT contracting at ASIC had fallen by more than 50 per cent over the last six years, from $114.6 million in 2009-10 to $55.4 million in 2014-15.
This steep and steady decline in the value of the agency’s ICT contracting was despite a commitment to additional investment in market research and analysis, as part of ASIC’s three to five year plan released in May 2008, and identifying new technology as a priority in the 2008-09 budget.
However, ICT contracting at the agency has already begun to rise, growing to $64.2 million in 2015-16, and is set to continue given the focus on ICT focused funding in the 2016-17 budget.