As the founder and CEO of marketplace lending platform MoneyPlace, Stuart has a strong grasp on the fundamentals driving FinTech’s dominance in Australia. Stuart is a member of the Federal Treasurer’s FinTech Advisory Group and was appointed as FinTech Australia’s new chair in January 2018. A passionate FinTech entrepreneur, Stuart has helped shape National FinTech and innovation policies. FinTech Australia is a not-for-profit organisation providing a range of services and programs that assist the FinTech community.
What do you predict will be some of the key issues/challenges facing the FinTech sector in Australia in the next 24 months?
Open banking is a big ‘make or break’ issue for the Australian FinTech community over the next 24 months. Open banking will free up the data from existing financial institutions that FinTechs need to drive innovation and their businesses. It was highlighted as a major issue in our EY FinTech Australia Census, where 85 per cent of respondents highlighted it as a policy priority (the equal second highest out of all priorities). The banks are pushing back hard against the reform, requesting delays and wanting to reduce the data sets which are in scope for the first phase (they want to exclude mortgages and credit cards). Feedback via our Census also showed that improved FinTech access to the New Payments Platform (NPP) is a very big deal, at this time we are not convinced it is the innovation platform that we hoped it might be. Other key issues outlined in the Census include:
- Improving the research and development initiative (87% support)
- Capital gains tax relief (85%)
- Reduced payroll and other taxes (83%)
The Australian government has been vocal in its support of Australia’s FinTech sector as it works to capitalize on the country’s competitive advantage. However, a lot of tech leaders suggest more can be done to further advance Australia’s FinTech sector to put it on the global map. What are your thoughts around this?
Our recent submission to the Productivity Commission outlines some of the changes we would like to see to grow our FinTech industry. In this submission, we say a new Australian FinTech industry development strategy is required, to define the regulatory and other steps which are required to grow our industry. We expect this strategy to include new ideas about how to increase competition in, and reduced barriers of entry to, the financial services industry, along with how we can better and promote the FinTech sector. We conclude that government and industry should work together to drive this strategy, but the development of the strategy does require specific government support. We believe consideration needs to be given to the creation of a new ‘super regulator’, which drives competition in financial services, but also helps guide innovation and industry promotion. We also say that the Reserve Bank of Australia should favourably consider the introduction of a formal access regime to the NPP, and other improvements should be made to the NPP so it becomes an improved platform for innovation. This includes the NPP making changes to its shareholding processes to encourage new FinTech participants, establishing an Innovation Hub, creating a data access model and delivering a credible arm’s length appeal mechanism for onboarding refusals. Finally, we say Australia’s FinTech regulatory sandbox needs to be expanded in its scope and also contain more extensive ASIC oversight.
What are the advantages of a start-up FinTech operating in Australia when compared to FinTech’s operating in nearby SE Asia, especially the FinTech hub of Singapore?
We think there are several differences between the Singapore and Australian FinTech environments. For starters, in Australia, we have the benefit of an active, involved and vocal FinTech community – via FinTech Australia which has a policy development role – along with a national government which is highly receptive to listening to the views of this community. We call this Australia as being ‘FinTech friendly by design’. Unlike Singapore, we also have the benefit of a range of highly liveable, friendly and multicultural State capital cities which are all home to FinTech industry hubs. Singapore is a single hub. This means FinTechs coming into our market have a choice of locations. Additionally, Australia has a relatively unique advantage of being a perfect test market for new products, thanks to the population size and diversity and a thirst for early technology adoption. Finally, the fact that Australia’s has the largest pool of managed funds in Asia – thanks to our superannuation reforms – presents a massive FinTech opportunity and a unique value proposition for Australia.
These insights are drawn from the TAS Banking Industry Report 2018. Read the full report here.