In a recent speech ASIC Commissioner, John Price, discussed ASIC’s Threat, Harm and Behaviour Framework, which enables it to identify, analyse and measure the threats and harms in the industries that it regulates.

We draw on extensive data from a detailed environmental scan, as well breach reporting data and published reports. Our review and prioritisation of threats and harms is systematic and involves extensive internal consultation, draws on external experts, and involves the Commission itself.

ASIC has identified five key drivers of harm that it focusses on:

1. Poor design and inappropriate sale of investment and protection products
Price said that harms will likely eventuate when the design, sale and distribution of products maximise benefits to product issuers and distributors, with little concern for the needs of the consumer.

He gave examples of retail Over-the-Counter products such as CFDs (contracts for difference), crypto-assets and consumer credit insurance.

2. Inappropriate sale of credit products to consumers
Price referred to responsible lending and to technology as enabling products such as payday loans, personal loans and credit cards to be sold quickly with low levels of ‘friction’ which may increase the incidence of consumers being sold products that do not meet their needs.

3. Poor conduct in financial markets
ASIC remains concerned about the misuse of information in our financial markets.

4. Poor governance
Price said that entrenched practices around poor board oversight and inappropriate remuneration structures provide a recipe for continued systemic misconduct

5. Use of Data
Price said that data is becoming an increasingly valuable commodity and controls are needed around its collection, storage, access and use. Organisations need to have adequate systems, controls and individual accountabilities to guard against these threats.