New Zealand’s Financial Markets Authority (FMA) has listed seven priority oversight areas for the next three years.

They are investor decision-making, governance and culture, conflicted conduct, capital market growth and integrity, sales and advice, front-line regulators, and FMA effectiveness and efficiency.

The regulator says this year’s Strategic Risk Outlook “describes what we believe are the current and main drivers of risk to fair, efficient and transparent financial markets”.

“Our goal is to raise trust and confidence in our financial markets, which we believe will deliver better outcomes for investors, businesses and our economy as a whole,” it says.

The report also flags issues on the FMA “risk radar”, including rapid technological innovation, which is expected to transform the financial sector in coming years.

While it recognises the benefits technological advances have brought, the FMA warns associated risks must be properly managed.

These include retail investors’ exposure to complex products, data security vulnerabilities, and a time lag between release and effective regulation to manage risk.

“On balance, we believe the benefits are worth pursuing, provided the risks are managed well,” the FMA says.

“Balancing the reduction of risk with innovation and improved efficiency in the sector is the challenge that we and other international regulators currently face.”