Australia’s corporate regulator has inked a FinTech partnership with its counterpart in Indonesia in a “terrific validation” for the work of the local sector.
The Australian Securities and Investment Commission signed the cooperation agreement with Indonesia’s financial services authority Otoritas Jasa Keuangan (OJK) in Melbourne last week. The partnership aims to “promote innovation in financial services in their respective markets”.
The deal means that the two countries have committed to sharing information on emerging market trends and regulatory issues, as well as to promote local innovation.
ASIC has made efforts to sign similar FinTech agreements with countries around the world, including financial capitals like the UK and Singapore, but also with smaller markets like Kenya and Canada.
The Indonesian partnership provides the “framework for cooperation between the parties with respect to promoting innovation in financial services” through information sharing and promoting innovation in each respective market.
ASIC Commissioner John Price said such deals are crucial for the local FinTech sector.
“Many FinTechs are not constrained by national borders and it is fundamental that we leverage this to share views, exchange information and to discuss some of the challenges that this can create for FinTech businesses and the community,” Mr Price said.
“We look forward to working more closely with OJK on the exciting FinTech developments in both our countries,” Mr Price said.
The deal is a validation for the Australian sector, Fintech Australia CEO Danielle Szetho said.
“It’s great to see our regulators are willing to engage and learn from incredibly fast-moving, dynamic and emerging markets, and also that these markets see Australia’s FinTech policy environment as an example of best practice for a developed, digitally advanced economy,” Ms Szetho told InnovationAus.com.
“There will be plenty of learnings and opportunities for FinTech companies on both sides, particularly in peer-to-peer, digital advice, and payments,” she said.
Ms Szetho said it is important local FinTech players investigate more closely what’s on offer in Asia, and deals like this will make that easier.
“It’s a terrific validation of Australia’s position as a gateway market in the Asia-Pacific. With a population of around 250 million, Indonesia is a great market for Australia-based FinTech companies to explore,” she said.
Australia is home to a growing FinTech sector, and it’s an area that the Federal Government has placed a special emphasis through Treasurer Scott Morrison.
Earlier this year Mr Morrison said the digitisation of the financial services space is a “paradigm shift” for businesses and government.
Policies put in place so far by the Turnbull Government include the creation of a FinTech Advisory Group, the introduction of a “regulatory sandbox” for tech firms to trial new offerings without a licence, the controversial introduction of equity crowdfunding and a range of taxation incentives for investors.
Indonesia’s own FinTech sector has also enjoyed rapidly growth, with the number of tech companies in the space growing by 78 per cent in the 2015-16 period, according to the Indonesia FinTech Report 2016.
There are now between 135-140 FinTech companies based in the country, with payments being the most popular niche.
OJK Chair Pak Muliaman said the deal with Australia will be mutually beneficial for both countries.
“I hope this further collaboration will be able to promote innovation in our financial services markets and to deepen engagement that can be used for financial sector development in both countries,” Mr Muliaman said in a statement.