Paul Derham
Cyber security continues to be the number one compliance concern for Australian Credit Licensees and Australian Financial Services licensees according to data released yesterday, reflecting the visibility and impact of this issue on regulated businesses, and the speed with which new threats are emerging.
This is one of several important findings from the 2025 Compliance Trends Survey released by leading financial services law and compliance firm, Holley Nethercote. This is the third year this research has been undertaken by Holley Nethercote.
It was conducted in February, taking in more than 200 respondents from across the Financial Services and Credit industries. Holley Nethercote Managing Partner, Paul Derham, said the in-depth survey helps licensees benchmark their practices against industry trends. It also confirmed trends in the types of legal enquiries the firm has been dealing with. “For the last 12 months, we have been inundated with AI-related record-keeping questions. This reflects the upward trend of licensees – from 10% to 46% – who are now using AI to draft meeting minutes. Another 33% of licensees are considering but have not yet adopted AI for this purpose.” “This is timely reminder that licensees are still responsible for the accuracy of documents generated by AI. Also, the audio and full written transcripts that AI creates are discoverable by ASIC or a Court and captured by various record-keeping laws” added Derham.
Another notable trend was a decline in spending. Forty percent of respondents spent less than $100,000 on internal compliance staff, compared to 29% in 2024. External spending has seen a similar decline, with 57% of respondents who spent less than $50,000 on external compliance, compared to 39% in 2024. “While this decrease in spending is likely a reflection of less regulatory change during the period, we expect this trend to reverse in the next 18 months, as a tsunami of regulatory reforms wash over corporate Australia, relating to AML/CTF, Privacy, Delivering Better Financial Outcomes, and Digital Assets” Derham said.
“It was also fascinating to see a rise in the number of respondents requiring complaints to be in writing, despite the fact that a verbal complaint is still a complaint that licensees need to address” Derham noted.
Conflicts of interests continue to be an issue, with approximately two thirds of smaller businesses (with up to 50 representatives) saying they have no conflicts of interest, and one third of larger businesses saying the same thing. This is despite the fact that Australia’s regulatory system works on an assumption that conflicts of interest are to be expected, and managed.
