Dr Daniel Mulino joins Amy-Rose Goodey on The House is Digital for a conversation on financial reform, digital assets, AI and the evolving architecture of Australia’s digital economy.
As Australia’s Assistant Treasurer and Minister for Financial Services, Dr Mulino discusses the balance between innovation, regulation and consumer protection as emerging technologies reshape financial services, payments and digital markets.
The discussion explores digital asset platform regulation, regulatory sandboxes, scams, AI, payments reform and Australia’s position in the global digital economy, alongside the opportunities and challenges created by rapidly evolving technologies.
A thoughtful conversation on productivity, trust, financial systems and building Australia’s digital future.
speaker-1: Wonderful to be here. Thanks very much.
speaker-0: I’m gonna start. I would like a little bit of a journey from how you came into this position. You have you’re the Minister for Financial Services, and you cut currently you have a lot of legislation, you’ve got a lot of reform sitting on your table. You’ve had quite an extensive career. I’d love for you to talk. about that and how you got to this moment and what it feels like right now.
speaker-1: Yeah, well look like a lot of people in politics, it’s been a somewhat ⁓ circuitous journey. so look, going back quite a while, ⁓ I I worked in ⁓ academia. I was a lecturer in macroeconomics ⁓ at Monash University ⁓ for a couple of years after having studied in the US. And I think that’s a really interesting ⁓ lens through which to look at ⁓ big ⁓ technological changes. I think macro economic perspectives ⁓ give you a bit of a helicopter view of how things might play out. And so that that’s always something that has stuck with me. After that, I ended up ⁓ as a local government counselor for a while and and and deputy mayor and then ⁓ was the ⁓ parliamentary secretary to the treasurer in Victoria for a while, which gave me a lot of really deep insights into the way that government works as a procure and a service delivery and then ⁓ moved into federal politics ⁓ after one term in the Andrews government and and spent six years on the House Economics Committee, which w was a fantastic place to be exposed to a range of economic issues, many of which are now playing out in the portfolio. And so now ⁓ feel very privileged to be in this portfolio at a time when ⁓ our economy is going through huge change, mu much of which is in financial services, but of course certainly not limited to that.
speaker-0: Yeah, you’ve got a you’ve got quite a diverse portfolio. A lot of your time is spent on self managed super funds and the super sector. ⁓ another another corner which I’d love to focus on also is the digital or the digital economy side of things. Are you seeing a lot of reform around the digital economy that’s front and center for you or some changes that you see coming down the pipeline?
speaker-1: Yeah, and obviously and I’m talking to a very well informed audience ⁓ that lives and breathes this. So I don’t wanna tell them how the digital economy works or or what’s ⁓ changing there, but just to kind of convey it from my perspective, ⁓ the digital economy is clearly ⁓ changing incredibly quickly and it’s having huge impacts right throughout the economy, including in in my portfolio. I mean, just to boil it down ⁓ to it it’s kind of basics in a sense, without wanting to oversimplify it. At the heart of it, as far as I see it, is ⁓ information. And and a lot of what’s going on in the digital economy, I think, is ⁓ the collation of information in ways which wouldn’t have been possible without the computing power that we we now have. And that’s affecting all sorts of things, including insurance, for example, in my portfolio. The computing power that we have and the digitization of information is now affecting the speed and cost of transactions. And so that’s running right through the tr the payment system, but but also digital assets and the way that they’re stored and and traded. But then of course it’s also affecting ⁓ computational power and the way in which we process information. And that that brings in things like AI and the way in which it affects forecasting, diagnostics, and all sorts of other ways in which information is processed. So that’s having a huge effect on productivity in a positive way. But it’s also creating all sorts of ⁓ regulatory challenges. So there are instances where, in addition to all the positives, the reduction in costs, the efficiency, the productivity gains that come from the enhanced processing and and better diagnostics, there are also issues that are being raised around, for example, privacy, around copyright. ⁓ And in my portfolio, if you look at, for example, insurance and the way in which digitized information is is leading to more accurate risk assessment, ⁓ but also in in relation to credit and banking, that can lead to potentially some people being excluded. So not surprisingly when something this all-encompassing is happening, it does raise ⁓ regulatory ⁓ challenges, which we’re we’re grappling with in a whole range of areas. But then of course there’s also, and you alluded to this, with digital assets, as you see the emergence of digital assets and ⁓ tokenized assets and, you know, tokenized custody platforms ⁓ arising. Y you need to think about ways of which you you regulate those kinds of forums so that people trust in them before they fully engage with them.
speaker-0: And I I think it’s difficult to find that balance between regulating and consumer protection and then enabling that innovation to flourish here in Australia. Is there is that something that ⁓ you think about or is there a way in which you do that within government to enable Australia to thrive and to reach those productivity milestones and that that efficiency that we’d love to see?
speaker-1: I think there are lots of instances where enhancing consumer protection and providing ⁓ clearer guardrails and standards is actually win-win. ⁓ it actually enhances trust in institutions ⁓ and markets. And we saw that with the digital asset platform and tokenized custody platform legislation that ⁓ recently went through Parliament. That was an example, I think, of where the markets themselves are going to function a lot better now, now that they have core regulation ⁓ built around holding an AFSL license and all of those clearly defined obligations. There are occasionally instances where consumer protection and efficiency might come into ⁓ tension. And that’s just that’s something which arises in many, many areas of regulation. And you just have to navigate your way through that. But I still I think in the case of digital, the digital economy, there are many instances where providing greater clarity, providing greater trust in in the new ⁓ technology that we’re seeing rolled out is actually gonna be win win.
speaker-0: You do a lot of reading. You’d have to keep your finger on s on the pulse in so many different corners of the Australian economy. There’s a lot of there’s a lot of papers that you need to read every single day. And I’m really glad that we have you to do that because I have this sinking feeling that a lot of young people are just gonna roll it through ChatGPT and I hope for the best. So thank you for doing all that reading and keeping up with all the legislation. When Australia is moving through all of this reform and trying to create these frameworks around technology that are moving so, so quickly, how does the Australian government keep up with all of the changes that that we’re seeing in in the digital world?
speaker-1: Well look, I certainly feel like I’m reading a lot, but I’m also conscious that ⁓ no matter how much I read, when it comes to a lot of these fast changing technologies, there are people in those industries who are always going to know more than me and and and know more than, you know, the the the advisors that I have. And so we need to be as up to date as possible and as well informed as possible. But it’s also critical that we continue to reach out to the sector and and to gain from their ⁓ understanding of of how things are evolving. ⁓ the other thing I’d say is in terms of keeping up to speed ⁓ with something that’s changing very rapidly, ⁓ you know, this this is that there is a ⁓ again a a tension in regulation in general, where where something i is new ⁓ and and emerging and you don’t necessarily as a regulator fully understand it, but ⁓ there’s a clear sense that it’s ⁓ creating a a lot of potential for productivity gains. But where there might also be a potential for ⁓ consumer harm or or some other kind of ⁓ risk that you need to manage, ⁓ that brings into ⁓ question for me are there instances where government needs to make sure that it doesn’t hold off on regulation for too long, but it should be cautious at first. a related point is this issue of the regulatory sandbox where when things are moving very quickly, you lean in at first in as much as possible. a no regrets way, ⁓ and and and try to as best as possible regulate so as to facilitate the good parts of the innovation. We’re currently having our regulatory sandbox reviewed and I think that’s gonna be a really positive ⁓ step to to ⁓ see what’s already in place ⁓ enhanced and and brought up to ⁓ Well’s best practice.
speaker-0: Yeah, and I’m I can tell you that in our corner of the industry, everyone is really excited about about that. And I think even ASIC and and the way that they’re approaching it is really refreshing. ⁓ so I’m quite I’m quite excited to hear what the outcome of that is. When we talk about globally and and the way that our innovation and our sandbox looks, ⁓ and and more broader, how is Australia positioned then? when it comes to regulating different digital even a we can go AI, but digital assets and even quantum maybe they’re probably not in your realm, but are we on par? Are we competitive?
speaker-1: Yeah, look, it’s it’s a big question and it’s a not a straightforward question to answer. ⁓ look, I’m more on top of regulation in in my sphere. ⁓ look, what I would say i is my impression ⁓ of Australia’s regulation generally, but I’ve I’ve got more familiarity with financial services. But financial services is a useful indicator because there’s a lot of AI and digitization in that part of the economy, so it’s a good guide. Look, my sense is that we are generally ⁓ you know, towards the frontier of best practice. Now, ⁓ there are so many elements to regulation that there’s always bits you can look at and say, we can probably learn from others on this front. So ⁓ look to to pick a couple of areas where there’s probably scope for strengthening. ⁓ the the sandbox is one example. And that’s why we’re holding a review where we’re looking at other jurisdictions such as Singapore ⁓ and the UK. And I think, you know, we’re we’re already ⁓ doing okay in that area, but you know, we have some scope to strengthen. ⁓ another area would be the digital asset platform and ⁓ tokenized custody platform ⁓ you know, area where we we now have moved significantly forward. And I think we’re now closer to the frontier than we were a couple of years ago. But I think it’s worth taking that broader view as a starting point that when you look at our regulators ⁓ across the the the spectrum, ⁓ in and and again, I’ll focus on financial services, you know, ASIC, APRA, ACCC, the Reserve Bank. Look, our regulatory structure is very solid. ⁓ they’re very independent regulators. They’ve got a high level of expertise. So I think when people overseas look at Australia, they they see us as being a very stable and well regulated economy. Having said that, we should always be looking for areas where we can strengthen and be open to ⁓ things that are working ⁓ better overseas. I I mean the other thing I guess moving away from the pure regulatory side a bit is that w when you look at the the the digital economy and AI as one subset of it, but a very important subset, I think a lot of people ask the question, are we at the frontier? And look, it’s it’s that that again is a tricky question in that look, we we want to be one of the innovating countries, not one of the technology or price-taking countries. As a medium economy, it’s it it’s probably not realistic for us to be at the frontier on every single dimension. ⁓ but clearly to me it it’s it seems that we are at the frontier in many areas of technology. So fintech would be an example. And in areas of AI, clearly it’s going to be in our interest to embrace that as much as possible. And and even if you know we don’t have the five biggest companies in the world, you know, located here with their headquarters, my sense is that there’s going to be many areas of AI where we can be at the frontier that are subsets of that sector and we should really embrace that opportunity. And and look, the the the the data centers is one example of that, ⁓ where look, we are in the top two or three countries in the world in terms of where they want to send that capital. And my understanding is that the bigger and more sophisticated the data centers, there’s a lot of spillover ⁓ skills and technology that w that come with those. So ⁓ I think when it comes to the actual technology, ⁓ look, we are doing very well in a whole range of areas.
speaker-0: I I would agree. And I I think when it comes to the digital asset platforms, to your point, the the movement that we’ve seen recently with the passing of that bill and and now law, it has sent a signal quite loud and clear to the rest of the world that we are now on par with them and open for business. So that that is very exciting. Yeah, I just had this thought around sovereignty and the incoming when it comes to AI and maybe Australia leaning on some of those international companies ⁓ might not be as beneficial.
speaker-1: So look, I think for me, ⁓ when you look at some of the really big international players, ⁓ and this would vary, I suspect, a bit by the technology. So again, I’d I’d be seeking to talk to a lot of your members about this. But you know, when you look at ⁓ for example, ⁓ the the the world’s very best search engine. I mean, yeah. So there’s obviously a few companies that invest huge amounts in in that space and are competing to be the very top of the tree there. And and again, with the very largest LLM ⁓ models. ⁓ so there is in a sense, there’s this battle between the these kind of ⁓ beeha moths for certain parts of the sector. But look, my sense is there’s also a great deal to be gained ⁓ in other parts of the sector. And there’s there’s all sorts of areas both in relation to ⁓ you know ⁓ social media platforms or ⁓ AI or all sorts of areas of the digital economy. and fintech is a is is a subset ⁓ where we we are already at the frontier. I think my sense is that in Australia we need to think about this ⁓ holistically. So we need to think about it in terms of do we have the right conditions to attract capital? We need to think about it in terms of our human resources. So are we training people up in our universities and our Vets and TAFE sector. But also, are we investing in people in the right ways in the workplace to make sure that they are able to undertake the research or under able to use AI? But also we need to think about it in terms of at the startups and the companies that are actually creating a lot of the technology. So obviously Tim Ayers and Andrew Charlton have a lot of the responsibility in in that realm. But but look, I’m seeing it play out. in financial services. ⁓ and my sense is that ⁓ we we can be a serious player in in many parts of the the digital economy.
speaker-0: Yeah. And I think we are. I’m very, very proud of our financial system here. And it’s almost too good sometimes because you there’s not a lot of when when you have conversations with people about stable coins and payments, the the comments back are we’ve got a really robust financial system here. What changes are worth being made? Because we’re a gold standard in in lots of ways. So ⁓ But there’s obviously a lot of things that can be done and should be done, particularly, you know, with that cross border efficiency and and how we ⁓ operate with our peers and other jurisdictions. When it comes to digital assets, how do you see them playing what’s their role in our financial system?
speaker-1: When talking about digital assets, I might also talk about the financial system more broadly and for example the payment system reforms, ⁓ some of which are being worked through the parliament in parallel with the ⁓ digital asset platform regulation. I think what you need with regulation of these kinds of environments is, in a sense, very clear ⁓ overarching rationales and principles and guidelines, but you also need enough flexibility. in the system to accommodate changes in technology that you just can’t envisage. So for example, ⁓ with the payment system, if you if you went back 20, 25 years, there probably would be a view of the payment system it which is that it ⁓ revolves around the banks and their customers. There’s certain pipelines and maybe the pipelines get enhanced occasionally. We need to regulate the cost recovery of those pipelines. We need to accommodate cash in the system and so forth. But you fast forward to when I was on the House Economics Committee over the last ⁓ two terms before taking on this role. And then suddenly we have ⁓ wallets explode in in their market share. And and there was a really interesting debate around are wallets a part of the payment system? Now there’s no straightforward answer to that. And and that was a fascinating topic that was investigated by the the economic dynamism and competition inquiry. ⁓ that that committee undertook last term. But there are other aspects of the payment system where there’s a question of first, is it part of the payment system or how should it be regulated? And so what we’re doing now with the regulation of the payment system is to provide really clear principles around ⁓ how that should be regulated and and what the goals are of the regulation in terms of what we’re trying to achieve for the economy and people, but also building in More flexibility so that as new technology arrives, some of which we’re seeing in embryonic stages, some of which we can’t envisage at this point, but that the processes are such that the regulation can accommodate that in a sensible way. I mean, similarly with digital assets and and tokenized assets, I mean, there are all sorts of assets that are already tokenized, ⁓ equities and bonds and real assets, but this whole ⁓ area is gonna Innovate in ways that we can’t ⁓ envisage. But I think if you look at a regulatory regime where they say, or where it says, ⁓ look, you’ve got to hold an AFSL license. That includes certain clear obligations about dealing with your clients and customers and stakeholders fairly, about ⁓ having certain ⁓ obligations to deal with ⁓ conflicts of interest, around having dispute resolution processes. These are really core. regulatory obligations that are very well defined and well established and applied in other areas of financial services. But it’s also a regulatory arrangement that will have to accommodate the changing nature of both the assets held or traded in these markets and held in these markets, but also the nature of the markets themselves, I suspect.
speaker-0: So the financial system is really evolving then. And you are essentially managing that evolution at your desk and with your team, who I would like to say is ⁓ very accommodating to our association. We’ve got some meetings with your advisors next week ⁓ just to run some things by them. So thank you. Thank you. so we can see the financial system.
speaker-1: You’re an important organization.
speaker-0: evolving. Is there anything if we were to look back in 20 years time and and we’re looking at 2026, is there anything in at this particular time where you would say, we did that really well. I’m really glad that we did that.
speaker-1: Well, look, I I’m I I’m hoping that our regulation, ⁓ the changes in the regulation of the payment system and and the digital asset platforms and token c custody platforms. ⁓ I I hope that that all plays out as we expect it will. ⁓ and I think that will be really ⁓ important. ⁓ I think both of those areas are really fundamental parts of our financial services sector now. I I mean another area ⁓ that we’re working on right now. Which is slightly tangential, but I think has elements of the digital world in it, is is scams, in that it’s a it’s a kind of application of AI and very sophisticated ⁓ data usage by the perpetrators. It’s also an example of the use of AI by the regulators and by the banks ⁓ and other ⁓ elements of that ecosystem. So if we’re to look at an area where Australia really is at the cutting edge of regulation and also I’d say best industry practice. It’s ⁓ scams is a good example, where we’re developing regulatory arrangements which incorporate not just the banks but the telcos and the and the digital platforms. ⁓ this is different to what is going on in the rest of the world and they’re all looking at ⁓ Australia. And ⁓ in in parallel with the development of the regulatory regime, there’s a lot of action ⁓ e even amongst the various industry stakeholders ⁓ in as as the regulatory regime is being worked up. So there’s a lot of work by the banks, for example, to prevent transactions to slow things down. There’s a lot of work going on to share information between both banks, but also with telcos. So for me, that’s another exciting area where ⁓ I think it it it really touches on the payments system ⁓ but also the digital asset. ⁓ markets ⁓ which ⁓ sometimes are a place where some of the outgoings occur. And so it’s all interrelated. But I think ⁓ w what it demonstrates is that I think you need to kind of progress on all the fronts at once if you’re gonna come up with a holistic solution.
speaker-0: Yeah, I think the National Anti-Scam Center, that is, and you’re right, it the the rest of the world is looking at the at that framework. It is a coordinated approach. And Australia is one of the most targeted for scams and v quite sophisticated scams as well, because we’re quite relaxed and we assume we’re going to get scammed and and so we just we’re wondering when it’s going to happen. So it’s a mindset thing. And so being the most or one of the most targeted countries, we ⁓ having the National Anti-Scam Centre, which is, to your point, very well organized because it is the banks. We have our digital currency exchanges engaging in that and our auditing and our blockchain analytics platforms as well. So I am quite excited about that. And I also think it’s a good example of how Australia. can build out this coordinated approach in defense. So that is yes, I am I I agree. That’s one of the flags that I think we send really well to the to the rest of the world.
speaker-1: I mean, just on why we’re a big target, I think another reason why we’re a significant target for scams is that we’re a very high income per capita country. So that’s I mean, that’s a good thing. We want to be a high income per capita country, but it makes us an attractive target. The other thing is not only that, but also we’re a very high ⁓ fin net financial assets per capita in that we have an incredible superannuation system. And and so increasingly I think when it comes to quite large scams, ⁓ You know, we we as and as our population ages, as more people approach retirement with with larger and larger balances, we really need to, as you say, harden Australia so that we become more resilient. ⁓ I give a lot of credit to my predecessor on this front. He really set up a an important framework. And and now, based on the legislation that was passed towards the end of last term, ⁓ we’re now building out codes and ⁓ dispute resolution ⁓ mechanisms. ⁓ we saw s total scam activity fall significantly, but now that’s troughed out and and on some measures might even be starting to rise again. So ⁓ it’s a really important area for us to maintain momentum in.
speaker-0: I wonder how we’re going to do it because of the the AI agents who are just, you know, they’re automated now and just coming coming at us and not just us. The the rest of the world is a is a target, obviously. So we’re just gonna have to be com continuously innovating within the Australian government as well as to how we combat some of that. exciting times and daunting. What’s what are some of the priorities on ⁓ in your world at the moment? What’s on your desk at the moment?
speaker-1: ⁓ well, look, ⁓ in terms of ⁓ the last couple of months ⁓ have just come out of the budget process. So ⁓ yeah, that’s been a a really significant ⁓ piece. ⁓ so so one of the the broader areas is superannuation. ⁓ and that that’s an area where a range of consumer protections have been the focus of the ⁓ first year of my time in this role. ⁓ and that’s an area where I work very closely with ⁓ the treasurer. So ⁓ for example, legislation around Payday lending was really critical. ⁓ something like six billion dollars a year not going into people’s accounts that should. So strengthening all of that’s critical. ⁓ but then ⁓ there’s a whole range of reforms we’re looking at in relation to consumer protection, particularly in the context of people having a lot of choice ⁓ as to where they put their funds. So that’s not dissimilar to some of the issues around scams. And in fact, that kind of broader area. of economic crime, I think is going to be one where a lot of the s same kinds of protections need to be considered. ⁓ so choice is a really important part of the superannuation system. ⁓ but as we saw with the collapse of two major ⁓ managed investment schemes recently, SHIELD and First Guardian, which ⁓ saw over eleven thousand consumers lose ⁓ a lot of funds, ⁓ we do need to look at ways to strengthen regulatory arrangements. So that’s been a real ⁓ focus. Another issue that I’ve had ⁓ carriage of is the ⁓ news bargaining incentive, ⁓ which involves ⁓ us basically using prods and incentives to say to ⁓ some social media platforms and search engines, ⁓ you should in engage in fair commercial deals with media ⁓ to reflect the fact that a lot of their material ⁓ has now gone onto your ⁓ platforms and that’s affecting their revenue base, acknowledging that journalism is such a a key underpinning of us telling our stories, finding out about the world and and f frankly, you know, democracy. So in a sense that relates back to some of the broader issues that you touched on earlier. it’s an area where Australia is leading in many ways. and and it’s a really important kind of connection point between the big social media platforms and search engines and all the positives they bring, but just making sure that they are regulated in such a way that ⁓ you know, they they interact fairly with media.
speaker-0: Yeah, I think they’ve got a lot of work to do on many fronts in in my view, particularly with ⁓ and and back to the s the scam center and some of the scam work and and the proponents ⁓ that the scene is proponents of some of these scams or the the origin of some of the scams. We have a massive event coming up in June and there are scammers who are pretending to be us and selling tickets on behalf of us. And we’re trying very hard to get that taken down. And ⁓ yeah, so it’s they are, ⁓ th they have a lot to answer for, I think. And it’s quite difficult to manage some of those scammers on those platforms. So
speaker-1: And what I’d say on scams is that ⁓ I I mean i when you when you look at the ecosystem and this is the way we’re increasingly talking about it, ⁓ you can’t regulate any individual part of the ecosystem in isolation, otherwise all the action will go to another part of it. And and so it’s really just it’s it’s it’s really just reflecting the fact that ⁓ in order to effectively build the resilience against the perpetrators, we need to have all of the different sectors working together. ⁓ a and you know, government is is a part of that.
speaker-0: Yeah. Yeah, it’s just this sharing of information and this knowledge that that is required to to combat these people. If you could envisage what success looks like for Australia and the broader Australian digital economy, what would that look like?
speaker-1: Yeah, so I think ⁓ for me success ⁓ has a few components. One is ⁓ I’d like to see all of the exciting ⁓ parts of ⁓ digital technology, AI, and and broader technology see productivity growth. And that has many ⁓ manifestations. Individualized services, higher quality services, greater speed and efficiency. better diagnostic tools so that you know it affects service delivery, whether it be doctors or lawyers or accountants. So the whole economy benefiting from that, but with the right safeguards. And so where those safeguards dovetail in such a way that they allow as much take up of the productivity gain as possible, but making sure that we protect particularly our vulnerable people. And of course the other thing is that government itself is going to be one of the major users of this. And so we are going to be having to go on that journey with the rest of the economy. There’s a huge opportunity for us as the entity which deals with everybody to make sure that if there are opportunities to raise service standards, to deal with people in a more individualized and effective way, that that we take all of those up. But again, that that we are cognizant of the need to apply the right guardrails. And so there’s a huge opportunity there. ⁓ And ⁓ I mean I look at it day to day most closely in financial services, in super and insurance and banking and financial advice, but ⁓ I’m very conscious that the way that it plays out there will reflect much, much broader trends across the economy and society.
speaker-0: Yeah, thank you. I’m quite confident as well. Globally we’re on this journey together. And so I don’t think it’s competitive. I think it’s we’re gonna look out and look in and hopefully achieve all the successes that ⁓ that are absolutely possible. So thank you, Dr. Daniel Molino, for coming on the Houses Digital Podcast.
speaker-1: No, thanks very much.
speaker-0: You’ve been listening to The House is Digital, where policy meets innovation. Stay curious, stay inspired, and be part of the movement building Australia’s next economy. The future is happening now. See you in the next episode.