The regulator’s new corporate plan has put small business lending practices and contract fairness in focus.
The Australian Securities and Investments Commission (ASIC) has revealed that it will examine whether non-bank lending practices are producing poor outcomes for small businesses under its 2026–27 corporate plan.
Released on Wednesday (26 August), the plan sets ASIC’s priorities for the year ahead and beyond.
ASIC identified SME finance as a focus within its consumer and small business agenda, amid continued growth in non-bank lending options for businesses seeking funding outside traditional bank channels.
The regulator said it would target practices that could disadvantage small-business borrowers, including the contractual terms attached to finance arrangements.
“We will examine lending practices by non-bank lenders that can lead to poor outcomes for small businesses, including the use of unfair contract terms,” ASIC said.
Distribution under the microscope
ASIC’s plan also signalled sustained attention on the way financial products are distributed and serviced.
The regulator said changing distribution models were reshaping the conduct risks it sees across financial services.
“Conduct risk across all sectors is increasingly shaped by distribution and servicing choices, rather than product features or firm size,” the regulator said.
It added that brokers were becoming more influential in the decisions consumers make across a broad range of financial products.
“Intermediaries such as mortgage brokers and platforms play a growing role in shaping consumer behaviour across both mass‑market and complex products,” ASIC said.
ASIC also confirmed it would continue surveillance of private-credit funds offered to retail investors, covering products distributed both directly and through advised channels.
“We will continue our surveillance focusing on the distribution of private credit funds to retail clients through direct and advised channels,” ASIC said.
Private credit has drawn growing attention across Australia’s financial system as non-bank sources of capital have expanded, including in property and business-finance markets.
AI, scams, and misconduct data
Technology will remain another major regulatory theme, with the regulator noting that it would monitor banks’ increasing use of artificial intelligence to detect consumer harms and risks.
“AI can improve services, productivity and decision making, but its use must not weaken accountability or consumer and investor protections,” ASIC chair Sarah Court said.
“ASIC will examine how AI affects consumers, respond to its potential misuse in markets and build our own capability to identify misconduct earlier and act more decisively.”
The corporate plan also outlined scam disruption through scam-site take-downs, information sharing with local and overseas regulators, consumer resources, and expanded registers that include Australian financial services licensee website addresses.
[Related: ASIC to release best interests duty report by Q4]
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