Australian Budget sets scene for FinTech growth

The latest Budget statement from ‘down under’, on May 9, reaffirmed the Australian Government’s intention to turn the continent into a global fintech centre.

Part of the plan is to impose a Aus$6.2bn levy on its banks over four years to contribute to the creation of “a more level playing field for smaller banks and non-bank competitors.”

This followed the announcement only a day earlier that the Government had “tasked the Productivity Commission to commence a review on the state of competition in the financial system.” Simultaneously, the Australian Competition and Consumer Commission has been funded to the tune of Aus$13.2m over four years “to undertake regular inquiries into specific financial competition issues.”

However, perhaps most interesting of all is the proposal to “establish an enhanced regulatory sandbox.” The statement goes on to say:

“This world-leading regulatory sandbox will allow businesses to test, for a period of 24 months, a wide range of new financial products and services, allowing businesses to evaluate the commercial viability of new concepts without a license, but subject to meeting minimum consumer protection requirements.”

Meanwhile, draft legislation has been introduced that will enable “proprietary companies to access crowd-sourced equity funding”, adding the proviso that “stakeholders will be protected by higher governance and reporting requirements.”

And, finally, the Australian Government has committed to introducing an ‘open data’ regime by 2018, having first conducted an independent review on the best approach to implementation, which should be out by the end of this year.

The package of proposals, which even includes the removal of taxation of digital currencies like Bitcoin, “delivers on the Government’s commitment to remove obstacles to the growth of FinTech.”

How very sensible, joined-up and familiar a lot of this seems. The Australians have had the advantage of being able to see the successes and mistakes of other jurisdictions, not least the UK, and to pick their way through to the best, but this all sets the scene for the continued growth of a vibrant FinTech sector ‘down under’. One to watch and proof that first follower can sometimes be a better strategy than first mover.