Watchdog warns of system‑wide pressures affecting consumers and financial firms
The Australian Securities & Investments Commission (ASIC) has set out priority risks for 2026, highlighting pressures across credit, superannuation, technology and market infrastructure that could affect consumers and financial institutions, including mortgage lenders and brokers.
The regulator pointed to persistent cost‑of‑living pressures, higher debt and geopolitical tensions, alongside rapid growth in artificial intelligence (AI) and AI‑enabled cybercrime.
ASIC said these forces are testing financial firms’ resilience and public confidence in automated decision‑making, while private markets expand, digitalisation accelerates and global regulatory approaches diverge.
“Highlighting the key issues for 2026 helps direct attention to where risks are most likely to emerge and underscores where ASIC is focused to safeguard trust, integrity and confidence in Australia’s financial system,” said Joe Longo (pictured right), chair at ASIC.
ASIC warned retail investors are accessing opaque, complex private credit and other private market products at low entry points (around $2,000), including via superannuation platforms. This increases risks of mis‑selling, poor product selection and inadequate disclosure. Earlier work found limited transparency and regulatory reporting outside superannuation, heightening investor risk.
Operational failures by super trustees and administrators also remain a priority, with harm driven by delays in claims, weak support, poor IT and cyber resilience, and rising fraud and scams. With nearly three million Australians due to access super in the next decade and over $750 billion moving into retirement phase, ASIC stressed the need to manage operational strain. It is also worried about switches into complex, high‑risk products driven by aggressive marketing and “cookie‑cutter” advice, and has 12 court cases underway related to the Shield and First Guardian matters.
AI‑driven decisions and scams are exposing consumers to new harms, amid uneven AI governance. While agentic AI can help consumers, its autonomy can amplify risk. Cyber threats are rising due to digitisation, legacy systems and third‑party dependencies, prompting ASIC to push for stronger risk frameworks and resilience testing.
In addition, ASIC flagged regulatory gaps around digital assets and AI‑enabled services, poor insurance claims handling after recent disasters, critical risks in replacing the CHESS market infrastructure, and mortgage market conduct risks as banks respond to low net interest margins with potentially riskier strategies and looser credit standards.
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