Australiarisks producing a "lost generation" of citizens stuck with a lowerstandard of living if the country fails to keep pace with global financialinnovation, ASIC Chairman Joe Longo said today (Thursday), asthe regulator published a landscape review mapping the country's standingagainst six major overseas jurisdictions.The report,prepared by the Digital Finance Cooperative Research Centre, covers the UnitedStates, the United Kingdom, the European Union, Singapore, Hong Kong, Canadaand Switzerland. Itconcludes that AI is moving into routine financial operations worldwide, whilefinancial services are being embedded inside non-financial digital platforms."Backers, NotBlockers" Is the New StanceLongo useda Tech Council of Australia event in Sydney to push his case. He told attendeesthat Australia is "in a global innovation race" and that failing toact could mean Australians "could be poorer for it as a nation in thefuture." He repeated his framing that he wants ASIC to be "backers,not blockers" of financial innovation.Industryengagement on parts of the agenda has been thin. Longo said roughly half themarket declined to take part in or even meet with ASIC's recent tokenizationsurvey, and only around a third provided detailed feedback.Thepushback comes as ASIC ramps up enforcement, securing a record A$349.8 millionin civil penalties in the second half of 2025.Australia Leads on BNPLand Real-Time PaymentsThe DFCRCanalysis places Australia in its "advanced" category in two areas. Domesticbuy-now-pay-later providers have been required to hold an Australian Credit Licensesince June 2025, placing the country ahead of the UK, where the FinancialConduct Authority will only begin regulating BNPL from 15 July2026, and alongsidethe European Union. Aroundone-third of Australian adults have used instalment payment services, accordingto Reserve Bank of Australia data.The NewPayments Platform also drew favorable comparisons. More than 1.82 billionreal-time payments, including Osko and PayTo transactions, were processedthrough the NPP in 2025. Australianstartups raised more than A$5 billion in venture capital last year, thecountry's third-best year on record, and produced 1.22 unicorns per US$1billion of VC invested since 2000, almost twice the US ratio.Lemonade, Square andBetterment Set the Global PaceThe gapwidens in insurance, SME credit and digital wealth, where the DFCRC foundAustralia trailing the US, UK and Singapore.Lemonade,the US insurtech founded in 2015, automated roughly 55% of its claims fullywithout human intervention as of December 2024, and 96% of first notices ofloss were handled by its claims bot, according to the company's 2024 annualfiling cited in the report. Simple claims settle in under three seconds. In SMEcredit, Square Capital, now part of Block, had originated more than US$18billion in cumulative working capital loans by mid-2025 based on merchanttransaction data, with Shopify Capital, Amazon Lending and PayPal WorkingCapital running comparable models.Betterment,the US robo-advisory platform, held roughly US$65 billion in assets undermanagement by early 2025 and charges 0.25% annually, against the 1.0% to 1.5%typically charged by human advisers. Longo saidthe technology could matter because Australian adviser numbers would need tomore than double by 2055 to maintain current coverage.EU and Singapore SetDifferent Templates for AI GovernanceThecompetitive context cuts across regulatory style as much as technology. TheEuropean Union's AI Act, which classifies insurancepricing and credit risk assessment as high-risk applications, imposes documentation, testing andhuman oversight obligations on lenders and insurers using algorithmicunderwriting. The bloc'sDigital Operational Resilience Act adds parallel rules on third-party techdependencies.Singaporehas taken a different path through its Monetary Authority's Fairness, Ethics,Accountability and Transparency principles and the Veritas toolkit, which givefirms practical assessment tools without prescriptive legislation. The European Central Bank has separatelywarned about AI risk in finance, and Australian and New Zealand regulators have flagged AI-powered investment scams as a growing problem.Open Finance and SupTechAre the Next BattlegroundsThe DFCRCidentified four priorities for Australia: clearer guidance on how existingobligations apply to AI-driven decisions, tighter oversight of financialproducts sold inside non-financial digital journeys, expansion of the ConsumerData Right beyond banking and continued investment in ASIC's own SupTechcapacity. The pushlands as Australia's parliament has alreadypassed legislationrequiring crypto exchanges and custody platforms to hold an AFSL, withpenalties reaching up to 10% of turnover for non-compliance.Longo saidASIC will keep working with the Reserve Bank of Australia on a potentialdigital financial market infrastructure sandbox. Further research on capitalmarket innovation and tokenization is due in June.This article was written by Damian Chmiel at www.financemagnates.com.