Australia’s top fintech lobby, FinTech Australia, has praised the Australian government’s new bills that would extend license exemptions for fintech start-ups. The amendments would allow eligible fintech enterprises to experiment with new ‘innovative and beneficial’ services from the initial 12 to 24 months without a licence.
“The construct of the original sandbox was excessively rigid in its approach,” said Stuart Stoyan, boss of FinTech Australia, in front of a parliamentary committee. Stoyan laments that only four fintechs have taken up the current sandbox and supports the changes. 78% of fintechs expressed that an expanded and more flexible regulatory sandbox regime is needed in a recent fintech census.
Sharing with committee, Stoyan recounted his own experiences of how it took over 18 months for his marketplace lender, MoneyPlace, to gain regulatory approval. “We spent a considerable amount of time and resources gaining a licence which arguably could have been better spent refining our technology and business model” Stoyan explained, before calling for sandbox to be more robust.
When challenged for further recommendation by the committee in addition to the government bill, Stoyan advocated for stronger changes, including:
- Expanding the operation and the regulatory oversight of the ASIC to deliver better guidance and support to fintechs;
- Raising the limits of superannuation investments and insurance caps to be less restrictive;
- Increasing the variety of products that can be experimented with in the sandbox and;
- Ensuring that only genuinely new innovative enterprises are admitted to the sandbox under ASIC supervision.
Referencing the previous speaker, Sophie Turner, a director of CHOICE, a consumer advocacy group, Stoyan agreed that the existing requirements of the sandbox, that products be ‘innovative’ so long it retains a degree of objectivity. Stoyan agreed that the principle of testing whether a product is innovative should be used in Australia. This current precondition exists in Hong Kong, Singapore and the United Kingdom.
However, agreeing with the committee’s chair, he spoke against the requirement of ‘consumer benefit’ in favour of a prevention of consumer detriment. “We would definitely agree that avoiding consumer detriment is a much better lens with which to view this than to say there must be a consumer benefit”, Stoyan noted.