The Asia-Pacific region must act now – and act together – to seize the opportunity for financial innovation. That’s the message in a keynote address by ASIC Chair Joe Longo at the Asia Securities Industry & Financial Markets Association (ASIFMA) annual conference in Sydney on 5 March 2026.
This year marks the 35th anniversary of ASIC and the 20th anniversary of ASIFMA.
Speaking to attendees, Longo says ASIC wants to be backers, not blockers, of financial innovation in Asia-Pacific – “and we are taking the lead to bring industry and experts together on ecosystem-level innovation”.
“We’re also interested in exploring how we can better support start-ups with pathways from regulatory sandbox to licensing,” ASIC’s Chair says.
“We need fresh thinking, smart risk-taking, collaboration across the private and public sector, and for boards and executives to play a strong role in driving innovation.”
Longo says this year’s ASIFMA annual conference is about the renewed promise of Asia’s capital markets, noting however “that promise is hollow if we don’t act now”.
“Together we stand at a crossroads: creative destruction in the pursuit of progress – or a forced retreat to the status quo. More simply, we must innovate – or stagnate, and condemn ourselves to years of playing catch-up,” ASIC’s Chair says.
“Which is why we must act now, and act together, to seize the opportunity. ASIC’s role in promoting financial innovation.”
Longo says ASIC supports open, robust, and competitive markets – where new innovations can compete for market share.
In its quest to be backers and not blockers of financial innovation, ASIC in 2025 launched a review of the ASIC Innovation Hub, which since 2015 has helped some 1,000 fintech and regtech businesses navigate Australia’s regulatory system.
Navigating structural change
With the review now complete, he says ASIC took a “clear-eyed look” at its effectiveness in delivering support for innovation, and identified several areas where it can improve.
“We also identified several areas where ASIC will take the lead on navigating the structural change that system-wide innovation brings, so that Australia’s markets are fit for the future,” Longo adds.
“For the last decade, we’ve run regulatory sandboxes, and currently we’re assisting an independent review of the government’s Enhanced Regulatory Sandbox to determine how well it supports financial innovation compared to international peers, like Singapore and the UK.
“One of the primary concerns we heard from industry in both our review, and the government’s, is about the pathway from sandbox to licensing: it needs to be far clearer, with more options.”
In the past five years, Longo says very few sandbox participants have successfully made this transition. What happens is many get to the end of the testing period and face a cliff – full licence or stop operating. There’s no in between.
He says ASIC is interested in exploring how it can better support the transition to full licensing – similar to some overseas models.
“One of the primary concerns we heard from industry in both our review, and the government’s, is about the pathway from sandbox to licensing: it needs to be far clearer, with more options”
“Imagine a potential model where a start-up enters the regulatory sandbox to test an AI-driven financial advice tool. From day one, ASIC briefs them on the broader regulatory regime, including the licences available for financial and credit services. ASIC assigns the start-up a ‘case manager’ to help them personally navigate the experience,” Longo continues.
“At the end of year one, and a year before testing is over, they meet with ASIC to discuss their ‘exit strategy’. Do they intend to apply for a licence – and perhaps need relief to facilitate their transition?
“Or will they become a representative of an existing licensee, sell their business into a bigger licensed firm or wind up because testing hasn’t demonstrated commercial viability? We think that this is a model that would better help manage the cliff that many start-ups face.”
Beyond this work, Longo notes ASIC has also been a key part of the Reserve Bank’s Project Acacia – “a very effective public and private collaboration for testing innovation and exploring future wholesale market models”.
He adds that the Digital Finance Cooperative Research Centre highlights one such opportunity – to the tune of $24 billion, which makes clear this opportunity could only come about if Australia starts to modernise and strengthen its financial system infrastructure through technologies like tokenisation.
“And only if the public and private sector work together. And only if regulatory and policy settings enable innovation. They’re three big ‘ifs’. Because the current path only projects about $1 billion per year in economic gains by 2030. So, there’s work ahead of us,” Longo says.
Longo calls for Australia to move beyond pilots and proof-of-concept trials, to roll-outs at meaningful scale, noting ASIC is leading the charge with a range of initiatives including being licensed in FCX to trade and settle shares in private companies and units in managed investment schemes; commissioning research into regulatory and legal barriers to asset tokenisation; and working closely with Treasury on how proposed digital asset and payment services law reforms might be implemented.
ASIC has also commissioned a scan of innovation in international financial markets to identify where it might be more proactive in seizing opportunities around innovation.
Embracing innovation across Asia-Pacific
“Of course, for over a decade, Asia has been an epicentre of fast-moving innovation, fuelled by demographic shifts and mobile-first expansion.
Supportive government policy has strongly contributed, with Singapore, Hong Kong, India, Japan, Malaysia and Thailand all running sandboxes to encourage financial sector innovation,” ASIC’s Chair continues.
“Last year, Singapore celebrated its 10th Fintech Festival – another birthday – and has emerged as one of the world’s leading fintech hubs, and today has more than 1,800 fintech firms.
“The fintech sector has matured across the region more broadly, and continues to attract significant investment with payments to the top funded fintech category in ASEAN last year.”
Addressing the way forward, Longo says all this speaks to a region choosing to innovate rather than stagnate – and technology being a key enabler.
However, regulation continues to play an important role.
“As APAC jurisdictions advance their respective regulatory frameworks across the areas of innovation that I’ve outlined, there is a danger this may create a patchwork of standards and siloed networks. This could open the door to the kind of ‘regulatory arbitrage’ ASIC has heard about, unfortunately more than once, in our consultations,” Longo adds.
“Of course, rules and regulations will never be harmonised across all jurisdictions – nor am I suggesting that they should be. But collaboration can help create common regulatory standards and approaches that facilitate innovative cross-border initiatives to benefit the region.”
Write to Adam Orlando at Mining.com.au
Images: ASIC, iStock & Unsplash
