The Australian financial services sector has been undergoing significant changes in recent years, with the emergence of new technologies such as blockchain, artificial intelligence, and digital currencies. These changes have created both opportunities and challenges for the industry, and policymakers have been working to keep pace with these developments.
In December 2020, the Australian Senate’s Select Committee on Financial Technology and Regulatory Technology released its final report on the opportunities and challenges facing the country’s FinTech and RegTech industries. The report identified key changes that are needed to support innovation and growth in the financial services sector, including greater regulatory clarity and support for digital currencies. It also made a number of recommendations for regulatory and policy changes to support the growth of these industries in Australia.
Key Changes
The final report of the Australian Senate’s Select Committee on Financial Technology and Regulatory Technology identified several key changes that are needed to support innovation and growth in the financial services sector. These changes include:
Greater Regulatory Clarity: The report recommends that the government provide greater clarity around regulatory requirements and standards, particularly for FinTech and RegTech startups. This would help to reduce regulatory uncertainty and support the development of innovative new financial services.
Support for Digital Currencies: The report recommends that the government provide support for the development and adoption of digital currencies, including through the creation of a digital currency taskforce. This would help to support the growth of Australia’s digital economy and promote innovation in the financial services sector.
Streamlined Regulatory Frameworks: The report recommends that the government work to streamline regulatory frameworks, particularly for small and medium-sized enterprises (SMEs). This would help to reduce regulatory burdens and support the growth of innovative new financial services.
Investment in Education and Skills: The report recommends that the government invest in education and skills development programs to support the growth of the FinTech and RegTech industries. This would help to ensure that Australia has the skills and expertise needed to compete in these rapidly evolving industries.
Projected Outcomes
The Australian Senate’s final report on FinTech and RegTech is expected to have several significant outcomes for the financial services sector in Australia. These outcomes include:
Increased Innovation: The report’s recommendations for greater regulatory clarity, support for digital currencies, and streamlined regulatory frameworks are expected to support greater innovation in the financial services sector. This will help to support the development of new products and services that meet the evolving needs of consumers and businesses.
Greater Investment: The report’s recommendations for investment in education and skills development are expected to attract greater investment in the FinTech and RegTech industries. This will help to support the growth of these industries and create new jobs and opportunities for Australians.
Enhanced Competitiveness: The report’s recommendations for greater regulatory clarity and support for digital currencies are expected to help Australia remain competitive in the global financial services sector. This will help to attract investment and talent to the country, and support the growth of innovative new financial services.
Another key recommendation is the need for better collaboration and coordination between regulators and industry stakeholders. The report emphasizes the importance of fostering a collaborative approach between regulators, industry bodies, and other stakeholders in order to create a more cohesive and effective regulatory framework for the fintech and regtech sectors. The report recommends the establishment of a dedicated cross-agency coordination group, chaired by the Commonwealth Treasury, to oversee and drive this collaborative effort.
The report calls for greater investment in regulatory technology (regtech) solutions to help improve compliance and reduce costs for both regulated entities and regulators themselves. The report suggests that the government should provide funding to support the development and adoption of regtech solutions, as well as establish a regtech advisory group to provide guidance on the development and implementation of these solutions.
The report also recommends the establishment of a national fintech accreditation scheme, which would help to provide greater certainty and confidence for consumers and investors when dealing with fintech firms. The scheme would involve a set of standards and requirements that fintech firms would need to meet in order to become accredited, and would be overseen by a dedicated accreditation body.
It calls for the establishment of a fintech and regtech innovation hub, which would serve as a central point for collaboration, education, and innovation in the fintech and regtech sectors. The hub would provide a physical space for industry stakeholders to collaborate, as well as resources and support for fintech and regtech startups and entrepreneurs.
The report represents a comprehensive and thoughtful approach to addressing the challenges and opportunities presented by the rapidly evolving fintech and regtech sectors. By focusing on key issues such as regulatory reform, collaboration, investment in new technologies, and the promotion of innovation and entrepreneurship, the report provides a roadmap for building a more sustainable, competitive, and innovative financial services industry in Australia.
References:
Australian Government. (2020). Final report: Review into the opportunities and barriers to the adoption of regtech in Australia. Retrieved from https://www.industry.gov.au/sites/default/files/2020-06/final_report_-_review_into_the_opportunities_and_barriers_to_the_adoption_of_regtech_in_australia.pdf
Senate Select Committee on Financial Technology and Regulatory Technology. (2020). Interim report: Australia as a technology and financial center. Retrieved from https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Financial_Technology_and_Regulatory_Technology/AusTechFinCentre/Interim_Report
Senate Select Committee on Financial Technology and Regulatory Technology. (2021). Final report: Australia as a technology and financial center. Retrieved from https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Financial_Technology_and_Regulatory_Technology/AusTechFinCentre/Final_report
