The corporate regulator wants data analytics to play a bigger role in tackling financial sector risks.

The Australian Securities and Investments Commission (ASIC) is working to strengthen its capability in this area, supported by government funding announced in 2016.

And Deputy Chairman Peter Kell says the regulator is especially keen on “recurrent data collection” to improve consumer outcomes.

“This will… help not only the regulator, but also industry participants, consumers and other stakeholders,” Mr Kell said.

“As a result, ASIC has been developing its use of data analytics to improve its ability to identify, analyse and respond to risks, and to achieve better consumer outcomes.”

Recurrent data will help ASIC better understand markets it regulates, detect and quantify risks, identify sub-sectors for deeper supervisory focus and improve consumer outcomes, in part by providing data publicly.

“A major benefit will come from greater consumer and community understanding and trust,” Mr Kell said. “We acknowledge that recurrent data collection will have a cost impact on industry. However, this work is an important element in ASIC’s regulatory and supervisory approach, so some cost will be unavoidable.

“There is a public benefit from greater transparency.”

ASIC is encouraged by results from a one-off data collection project around add-on insurance sold through car dealers, which produced evidence products were not meeting consumer expectations.

“Prior to our report on this issue, there had been no hard data to demonstrate how poor most of these products were,” Mr Kell said.

“The report has resulted in major industry change, and we intend to ensure regular updates are provided.”