Using Technology to Address DDO

If you have already started on the journey to become a client-centric organisation we can begin assessing some potential enabling technologies and online solutions that will help address implementation and full compliance with the DDO regime. First port of call would be to look at the technology and processes you currently have and asses if any component could either be duplicated,  re-used or leveraged as either an incremental or a complementary solution to also comply with  DDO.

For example, we examine if your firm has had to comply with any other governance, compliance or risk related comparable regulations before, these can be legislation as required by:                                   

• NCCP – Credit licensing: Responsible lending conduct 
• APRA – Member Outcome Obligations (RSE Licensees) 
• AFCA – The Dispute Resolution Systems and Internal Dispute Resolution (IDR & EDR) Procedures
• APRA – Banking Executive Accountability Regime (BEAR)
• Financial Accountability Regimes (BEAR and FAR)
• Mortgage Broker Best Interest Duty
• Future of Financial Advice (FOFA) – Best Interests’ Duty and Related Obligations
• Advice Fee Consent and Independence Disclosure
•  General Insurance Code of Practice
•  Consumer Data Right Rules (CDR) / Data Sharing Phase 1 & 2
•  RCR The Financial Sector Reform – Protecting Consumers 

Or any overseas jurisdiction regulation that requires your international branch to comply with, these being:                                    

• • • Markets in Financial Instruments Directive – MiFID II legislation – ESMA, Europe
    • Heightened Supervision for Complex Products, FINRA, USA
    • Retail Product Development and Governance — Structured Product review, FCA, UK
    • Senior Managers & Certification Regime – SMCR, FCA/PRA, UK

If your firm is complying with some of the above regimes, there is a good likelihood that underlying technology and processes can be augmented and potentially leveraged further. It is also worth noting that some large Australian vendors in financial markets have developed some components that address key areas of DDO compliance – keep an eye on our blogs as we identify and asses some of these key players in the market. 

If you feel that you still require to implement new systems and processes in order to satisfy ASIC’s obligation of effective product governance arrangement, we can recommend and implement some leading-edge automated technology and cloud-based collaborative /  authoring software as a service (SaaS).  These solutions are cost-effective and can be scalable enough to implement a solution that can forge connections while providing great customer experiences.

Contact Discidium here for an initial free consultation

Annual Compliance Costs for the Industry as a Whole to Amount to $94.7 million

Industry concerns about implementation costs could be dealt with by ensuring the obligation builds on good practice, is principles based and is applied on a scaled basis, allowing scope for firms to adapt their existing practices. Thus, the new obligation imposes minimal costs on firms with existing good practices. Some incremental costs for industry may include client categorisation, record keeping, updating documentation and staff training, as well as monitoring changes in the external environment.

The Government assumes that the new DDO Law option delivers benefits to industry, including strengthening internal risk management for product design, which may mitigate future problems, as well as signalling a higher level of customer focus. This approach also avoids new, more complex and interventionist regulation in the future, promoting efficiency in the financial system overall. 

Assuming that the new DDO Law option delivers benefits to industry, including strengthening internal risk management for product design, which may mitigate future problems, as well as signalling a higher level of customer focus. This approach also avoids new, more complex and interventionist regulation in the future, promoting efficiency in the financial system overall.

• developing policies and procedures to ensure that they are complying with the new requirements;

• changing product review and distribution standards; and

• communicating with other distributors and issuers as relevant.

The costs also include updating IT systems to ensure that existing systems are compliant with requirements and that they will be able to monitor products and customers on an ongoing basis.