Fintech on the agenda: Australian Federal Budget 2017

Australia’s fintech industry body has welcomed open data reforms, digital currency tax cuts, and reduced barriers for banking licenses handed down in the 2017 Federal Budget.

The Australian fintech industry will be benefitting greatly from the initiatives handed down in the 2017 Federal Budget on Tuesday, according to Fintech Australia chief executive, Danielle Szetho.

Commenting on the provision set out for Australia’s fintech sector in this year’s Budget, Szetho said the burgeoning fintech industry had been treated well.

“We welcome these initiatives – they’re a huge step forward when it comes to growing a globally competitive Australian fintech industry, that will also deliver greater choice and improved financial outcomes for consumers,” she said.

“We’re also proud that many of these initiatives have come about through the strong and detailed advocacy work undertaken by Fintech Australia and its members.”

Szetho said competition and accountability would be the key focus for reforms around fintech, which would see Australia’s banking system made fairer.

“The government has clearly used the budget to reaffirm its commitment to Australia’s fintech industry, and sees this industry as a driver of increased consumer choice and jobs growth in financial services,” Szetho said.

“We now welcome the speedy implementation of these initiatives, given that Australia is in an extremely competitive and fast-moving global environment when it comes to establishing a regional fintech advantage.”

There will be help to improve fintech firms’ access to positive credit data to provide more choices for consumers after the announcement of the legislation of a mandatory comprehensive credit reporting regime, if credit providers are not providing above the 40 per cent benchmark of data information at the end of the calendar. The Budget has also called for digital currency users to not be hit with GST on the use of the currency.

Szetho said the industry had thrown its support behind the proposed expansion of Australia’s fintech regulatory sandbox from 12 to 24 months for the testing of fintech products. The government also introduced a framework to allow fintech firms to easily access bank customer data by 2018, in the wake of a review to be conducted this year.

Steps to reduce barriers or fintechs to move into the realm of ‘challenger banks’ have also come into play, with the change of current bank shareholder restrictions; financial institutions with less than $50 million in capital will also be able to define themselves as banks.

Szetho said the industry body remained committed to supporting the government develop initiatives for the fintech industry which would include further overhauls to regulation.

“We will also be seeking to work closely with the government as it establishes the new Australian Financial Complaints Authority,” she said.

[This is] to ensure it provides a fair and low-cost outcome for fintech firms who will be subject to its activities.”