Projects

Client: Financial Services Council
Title: Better breach reporting: Quantifying the compliance cost savings from the FSC's recommended reforms

Client’s Challenge
The Australian Securities and Investments Commission (ASIC) uses a reportable situations framework to monitor and regulate financial services entities. This framework requires entities to report breaches and other significant situations to ASIC. The reporting of ‘deemed significant’ breaches since 2021 has resulted in many more breaches being reported, most of which are minor.

The Financial Services Council (FSC) has proposed reforms to streamline the process, aiming to reduce compliance costs associated while maintaining strong consumer protections. These changes have the potential to improve compliance efficiency, deliver cost savings, and uphold trust in the financial system. To support these reforms, the FSC sought a detailed economic analysis of the current regulatory burden and the potential reduction in compliance costs if the FSC’s reforms are implemented.

Our Solution
Positive Economics Advisory analysed the regulatory burden of the current system and the potential reduction in the regulatory burden from the FSC’s reforms. We developed a methodology consistent with the Australian Government’s regulatory burden measurement framework. We surveyed 29 businesses and completed 13 in depth interviews with FSC members to understand the processes and costs involved in complying with the current regime. A public facing report was prepared for the FSC that sets out the quantified regulatory burden of the current breach reporting system and the compliance cost savings from implementing the FSC’s reforms.

Media coverage of the report outcomes were reported in The Australian and on Ausbiz.