The newly established Senate Select Committee on Financial Technology and Regulatory Technology recently released an Issues Paper regarding the role of FinTech and RegTech in Australia, particularly in respect of Australia’s competitive position as a nation in these growing global sectors.
The Committee’s formal remit (its terms of reference) is to inquire and report on:
- the size and scope of the opportunity for Australian consumers and business arising from financial technology (FinTech) and regulatory technology (RegTech);
- barriers to the uptake of new technologies in the financial sector;
- the progress of FinTech facilitation reform and the benchmarking of comparable global regimes;
- current RegTech practices and the opportunities for the RegTech industry to strengthen compliance but also reduce costs;
- the effectiveness of current initiatives in promoting a positive environment for FinTech and RegTech start-ups; and
- any related matters.
The Committee’s stated objective is to investigate opportunities for government to promote effective and sustainable growth in these sectors in order to enhance Australia’s economic competitiveness, especially as the FinTech industry is a significant sector of the global economy (with the Issues Paper referring to a KPMG finding that global investment in FinTech companies reached US$37.9 billion in the first half of 2019).
Amongst many issues and questions the Committee has invited FinTech and RegTech industry participants to respond to, we find the following of particular interest:
- Do current regulatory settings support the growth of local FinTech and RegTech companies in Australia?
- What are the key reform priorities that will enable FinTech and RegTech innovations to flourish in Australia?
- To what extent should government encourage or incentivise the disruption of existing financial services business models by new market entrants, as opposed to promoting partnerships between new and incumbent players?
- What are participants views on recent and forthcoming changes to policy settings and regulatory initiatives affecting the sector (e.g. implementation of the new Open Banking framework; introduction of the NPP in 2018 (New Payments Platform); and ASIC’s FinTech regulatory sandbox)?
- How should Australia to take a prominent role in supporting and developing international blockchain standards?
- Do the tax incentives offered for ESVCLP and VCLP support growing FinTech start-ups? Should the government consider further work to support VC investment in FinTech start-ups?
- Are there measures that can be taken to support the FinTech sector’s ability to raise capital from other types of institutional investors (e.g. superannuation funds)?
- How can public sector data be made more accessible and useful for FinTech and RegTech companies seeking to deliver innovative products and services?
The Committee has called for written submissions to its inquiry by 31 December 2019.