ASIC Chair Joe Longo (pictured) has outlined the major forces reshaping Australia’s financial system in 2026, warning that cost‑of‑living pressures, rising debt, geopolitical tensions, and rapid advances in AI are combining to increase volatility and consumer harm.
Regulatory settings are also fragmenting globally, while private markets and digitalisation keep expanding. Taken together, ASIC says these system‑wide forces cut across every sector it regulates and will shape its priorities in the year ahead.
Recent figures show ASIC investigations are up 50% and new civil enforcement actions nearly 20%, as the regulator lifts its enforcement response alongside its new priorities.
ASIC is concerned about growing retail exposure to private credit and other private market products, with minimum investments now “as low as ~$2,000” and access increasingly available through platforms and superannuation.
The watchdog warns this expansion raises the risk of mis‑selling, unsuitable product selection, and decisions made without adequate disclosure, particularly in markets it describes as inherently less transparent and subject to constrained supervision and heightened investor risk.
Super fund trustees’ operations remain a major focus. ASIC points to delays in claims, poor service, weak IT, and cyber resilience, and rising fraud and scam risks as key drivers of member harm.
With nearly three million Australians due to reach access age over the next decade and more than $750 billion expected to move into retirement phase, the regulator says the system must be ready for mounting operational pressure.
ASIC is also targeting aggressive marketing, lead‑generation, and “cookie cutter” advice that pushes consumers into complex, high‑risk investments via managed investment schemes and similar products. It is working with government and consumer groups on legal and regulatory gaps and running education campaigns to protect retirement savings, with 12 court cases underway related to the Shield and First Guardian matters.
ASIC highlights growing consumer exposure to automated decisions, AI‑driven interactions, and scams amplified by technology. The regulator notes that while agentic AI can help people shop around and avoid loyalty penalties, it can also compound risk given its capability to independently plan and act, especially where AI governance is immature.
Rising calls to the Australian Cyber Security Hotline, more incident responses, and increasing threat notifications underscore the need for stronger cyber resilience. ASIC is urging directors and financial services licensees to test their crisis plans, uplift risk frameworks, and closely manage vulnerabilities in third‑party providers.
Regulatory gaps around emerging participants – from digital assets and payments to users of AI – also remain a priority. ASIC notes that innovation at, or just outside, the regulatory perimeter is fuelling risks such as unlicensed advice and misleading conduct, and says clear licensing expectations and “effective perimeter oversight” will be central to its 2026 agenda.
Beyond conduct and consumer issues, ASIC is watching market plumbing and disclosure quality.
It has warned that delays or failures in the CHESS replacement project – especially given the December 2024 outage and continued reliance on ageing technology – pose a major risk to market stability, operational resilience and investor confidence.
ASIC is also concerned about poor financial and sustainability reporting, including inconsistent superannuation investment disclosures, limited transparency on certain expenses, and insufficient audit evidence for valuations, alongside the risk of misleading or incomplete climate‑related disclosures.
In banking, historically low net interest margins may be pushing some players towards riskier strategies. ASIC is alert to relaxed credit assessments, unsuitable or larger loans, product changes that disadvantage lower‑margin customers and more aggressive marketing into higher‑risk products, warning that these responses to competition could drive significant consumer harm.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
