The Turnbull Government has put Australia’s fintech future firmly back on the agenda with a series of policy reforms announced to help nurture a competitive regulatory environment.
The Turnbull Government has today set out its vision for fintech innovation in Australia with a series of policy reforms announced to help nurture a competitive regulatory environment.
Speaking at Stone and Chalk this morning, Federal Treasurer Scott Morrison said more work was needed to help the country realise its innovation potential, particularly as Australia looked towards international markets such as the US and UK and the extent to which an adapting regulatory environment has resulted in competitive gains for their respective economies.
“The mantra across the [Australian] start‑up community is ‘global from day one’, recognising the opportunity of the global market … it is clear the start‑up sector has grown strongly in the past few years but there is still a long way to go,” the Treasury said in its Backing Australian Fintech report.
“Venture capital funding in the UK and Canada is significantly higher as a proportion of gross domestic product than here in Australia … Our challenge now is to capture the competitive gains that come with pioneering innovation and leading the way in global markets.”
Among the key reforms introduced are changes to Australia’s comprehensive credit reporting (CCR) regime to encourage data availability, refining crowdfunding regulations, addressing the ‘double GST’ treatment of digital currencies, and opening up access to concessional tax treatment for venture capital investments in fintech firms.
The Government’s fintech statement is part of the broader Innovation and Science agenda framework and comes in direct response to a series of recommendations that were tabled together last month by Fintech Australia – led by Reinventure Group’s managing director, Simon Cant.
“Fintech is the engine room of the Australian economy, enabling all other industries to grow and transact,” Cant said.
“With hundreds of dynamic rapidly growing fintech ventures transforming financial services for Australian consumers and businesses, the Treasurer’s commitment to supporting this sector bodes well not just for Australian fintech start-ups, but for the Australian economy overall.”
Regulatory sandbox and CCR mandatory
MoneyPlace’s chief executive, Stuart Stoyan, lauded the Federal Government’s decision to allow the Productivity Commission to review the comprehensive credit reporting regime, arguing there are significant benefits to be realised by making the scheme mandatory – including allowing Australian borrowers to access “better and fairer” interest rates.
“For too long consumer information has been locked up in the hands of a few large banks. CCR is all about making this information fully accessible, which not only means lower rates, but also better enables responsible lending practices by all lenders,” he said.
“We need full and complete participation in CCR by all lenders. Australia lags most other countries in credit reporting and the continued delays to full participation in CCR are a national embarrassment.”
SelfWealth founder, Andrew Ward, said the reluctance of Australia’s big four banks to embrace the Federal Government’s CCR scheme had hindered the evolution of our local regulatory framework for innovation.
“Not sharing data draws a line in the sand and shows that the banks are scared. They talk about innovating but continue to resist sharing data [and this] means they obviously don’t back themselves,” Ward said.
“Eventually they will be named and shamed and regulation must support all institutional involvement to release their data.”
The Federal Government also said that it was working closely with the Australian Securities and Investments Commission (ASIC) to help lay the foundations for developing a “regulatory sandbox” for Australian fintech.
The collaboration sees ASIC unveil new guidance notes for robo-advice – announced as ‘digital financial product advice’ – to provide greater clarity to new advice providers and their Australian consumers.
“The Government is keen to develop a world leading ‘regulatory sandbox’ in Australia that will enable firms to manage regulatory risks during testing stages, reducing the cost and time to market products,” an official statement from the Federal Government reads.
“At the same time, any ‘sandbox’ will need to provide for important consumer outcomes such as fit and proper checks, dispute resolution and consumer redress arrangements.”