Following the February announcements, today the Treasurer has further endorsed the development of a thriving FinTech industry in Australia by announcing a series of prospective commitments to the sector. During the launch, which included a number of FinTech CEO’s, several potentially significant issues were aired. Whilst talk is cheap, if they follow through, it would amount to a significant vote of confidence for the growing sector.
Funding: From a funding perspective, the government said that they would look to enable FinTech ventures to receive investment from VC funds who are registered under the Venture Capital Act (currently not possible) and would also examine ways to refine the Crowd Funding regulation to bring it up to par with other leading FinTech markets.
Digital Currencies: the Government will be addressing the double GST currently applicable to bitcoin and other players and will also review the application of Anti-Money Laundering (AML) and Counter‑Terrorism Financing regulations to address the inability of digital currency operators to secure banking relationships.
Regulation: They will create an appropriate regulatory environment for start-up ventures so they can experiment with new models for the delivery of financial services to consumers without having to spend their scarce start-up capital on licencing before even testing their model.
Robo-Advice: New guidelines on Robo-Advice (see ASIC’s announcement today).
Competition: Acknowledging the barriers to competition which the large financial services players have, they will refer the issue of more open access to financial data to the Productivity Commission. For example, credit data is regarded as a “strategic” asset by some banks, and they do not share positive credit data, despite the new credit regime.
China: The development of funds management passports with China.
This raft of measures if implemented effectively could certainly bring even greater momentum to the FinTech sector, and mark a potential sea change in the competitive landscape in Australia. Beyond that, the broader Asian market might also be addressable, and Australia could become an innovation hub.
