The 2016-2017 Federal Budget placed Australian fintech back on the government agenda, but what developments are already in motion?

The announcement of Treasurer Scott Morrison’s partnership with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to research the potential uses of blockchain technology in Australia came as a surprise to some, but the wheels are already in motion for a major overhaul of the broader national finance and innovation sector.

The government’s Budget promotions notice pointed to the fintech industry in Australia gaining prominence, with nine home-grown companies leading worldwide fintech innovators in 2015. Among the already implemented changes was the April launch of TruePillars – the Australian fintech innovator firm which is capitalising on the interest in fintech to revolutionise small-business lending. This comes as a welcome change for SMEs and entrepreneurs, with loan approval at the big foud banks sometimes taking up to nine months for loans to be approved.

TruePillars borrowers are vetted by conventional risk-management processes and are then anonymously offered to online investors.  Bidding between investors then begins in order to offer an interest rate on the money that they are able to provide. Investors’ bids are automatically pooled and matched together, with investors’ stakes tracked and repayments distributed relative to each individual proportion within the loan.

SMEs are also set to benefit from Australian fintech start-up, Octet, which offers a trade-finance platform, simplifying SME payments by aligning with credit card interest-free features. Due to the high level of prudential control over Australia’s banking industry, alternative lenders have had limited opportunity to offer platforms similar to what Octet will now present.

The government’s newly reinforced commitment to engaging with innovative technologies, notably blockchain, may also lead to the review of micro-economic and competition policy, as well as changing the framework and functioning of Australia’s consumer landscape.

With emerging developments already on the horizon, the country is set to welcome a new shift in the business dynamics of the nation focused on promoting the collaborations of finance and technology.