The industry body for fintech startups, FinTech Australia, has declared the budget a winner, citing multiple measures that will assist entrepreneurs challenge the big banks.
The budget included an expansion of the regulatory sandbox, which allows fintech startups to pilot products without requiring a full licence; a commitment to open up big bank data to startups; and reducing requirements for businesses to act as and call themselves “banks”.
FinTech Australia chief executive Danielle Szetho welcomed the announcements, saying the initiatives were “a huge step forward” to foster “a globally competitive Australian fintech industry”.
“It is pleasing to see that the government has clearly used the budget to reaffirm its commitment to Australia’s fintech industry, and sees this industry as a driver of increased consumer choice and jobs growth in financial services,” she said.
The regulatory sandbox, first established in December, has been extended from a 12-month program to 24 months, while an independent review into opening up bank data will be conducted this year with a view to opening up access next year. The budget also proposed to loosen shareholder requirements for banks and allow businesses with less than $50 million in capital to call themselves banks — both measures that will help fintechs to compete in the mainstream consumer market.
Daniel Foggo, chief executive of fintech RateSetter, commended treasurer Scott Morrison for supporting the Productivity Commission’s recommendation to open up bank data.
“In requiring big banks to give consumers greater control over their own data, the government has stood up to the banking sector lobbyists and shown it’s serious about boosting competition in financial services in Australia.”
Foggo said that such reform would allow consumers to easily switch to non-bank financial service providers.