ASIC Outlines 2026-27 Supervisory Priorities

The Australian Securities and Investments Commission (ASIC) has published its supervisory priorities for 2026-27 through a new set of sector-specific letters to boards and executives, with its banking priorities focused on AI, lender conduct, systemic compliance failures, and customers in financial difficulty.

The letters set out the supervisory activities ASIC expects to undertake in each sector over the coming year, giving firms earlier visibility into where regulatory attention will be directed. ASIC Chair Sarah Court said the initiative responds to industry requests for greater certainty and forms part of efforts to “increase transparency, reduce unnecessary duplication and make regulatory processes easier to navigate while maintaining the quality and integrity of regulatory outcomes.”

In its letter to the banking sector, ASIC identifies AI as a significant area of focus. A review expected to begin in the second quarter of 2026-27 will examine new and proposed uses of AI by banks, particularly in customer-facing activities and their potential impact on consumers. The work builds on ASIC’s 2024 review, which found that AI adoption was growing faster than governance and risk assessment, including consideration of consumer risks.

ASIC also plans to review lender conduct, including the effects of changes to short-term variable remuneration for proprietary lenders, the use of referrers, and banks’ oversight of brokers.Separately, ASIC will coordinate with the Australian Prudential Regulation Authority (APRA), including by drawing on APRA’s work on bank lending to small businesses rather than duplicating regulatory requests.

The letter also reinforces ASIC’s focus on systemic compliance failures and basic customer outcomes. Following its recent review of mortgage offset accounts, ASIC told banks to assess whether their governance, controls, monitoring, and remediation arrangements are sufficient to ensure customers receive promised benefits. It will also continue focusing on debt collection and financial hardship practices, particularly the treatment of vulnerable customers.

The supervisory letters form part of the Council of Financial Regulators’ Better Regulation Roadmap, under which ASIC and APRA are seeking to improve coordination, reduce duplication, and give regulated firms clearer forward-looking visibility into supervisory activity.