THE FMA VIEWPOINT ON TECHNOLOGICAL CHANGE IN FINANCIAL MARKETS
Rob Everett, chief executive of the Financial Markets Authority says it is inevitable that technology will change the way financial products are offered to consumers and probably introduce new products in the years ahead.
“Our focus is ensuring that financial institutions are putting the interests of customers first when it comes to the products and services they offer- this focus remains the same whatever changes technology may bring,” he says.
One of the purposes of the Financial Markets Conduct Act is to promote innovation and growth and to allow new entrants to come to the market. Everett says the FMCA provides the FMA with a robust, modern and flexible set of regulatory tools to deal with issues in the market now and to accommodate future change.
“Technology can also have a positive impact on the way consumers interact with financial service providers and their products. Equity crowd funding and peer-to-peer lending were two of the new innovative financial products that were specifically enabled through the FMCA.
“Our role, no matter what changes take place within the marketplace, is to be consistent in the way we implement the new conduct regulation and to remain efficient and effective in supervising and monitoring all the licensed organisations. Through our increased licensing powers, the new regulations also allow us to get closer to the people and businesses we regulate.”
Everett says the FMA’s strategic outlook identified new business models, advances in technology and more complex products as issues that would require greater attention from the regulator and also greater attention from investors to ensure they were taking responsibility for their decisions.
“Investor decision-making and increasing investor capability is a key part of wellfunctioning financial markets and part of our role is to help build this capability. As much as investors need to be cautious around any investment – no matter what technology is involved or how it is served – it’s critical they understand the risks and the benefits associated with products when they are handing over their hard-earned money.”