Labor will fund new ASIC innovation resources to support FinTechs in Western Australia if it wins the upcoming federal election in order to stem the flow of companies relocating to the major cities of the east.
Shadow digital economy minister Ed Husic and shadow financial services minister Clare O’Neil made the announcement in Perth on Thursday afternoon.
The pledge is for a new ASIC executive to be based in Perth, extending the reach of the regulator’s Innovation Hub, which is currently only based in Sydney. This representative would work with Western Australian-based FinTechs on regulation and licensing, and help to reduce the need for them to travel interstate or relocate entirely, Mr Husic said.
The policy emerged from a roundtable the Opposition held with Western Australian FinTechs last year, with Mr Husic then working on the idea with Ms O’Neil’s office.
“We worked together on scoping out what it would take to fix that, and it’s a really inexpensive solution. Expanding ASIC’s presence in Perth won’t cost a lot and to many it may not sound like a lot, but for the firms that rely on it, it’s a big deal,” Mr Husic told InnovationAus.com.
The expanded ASIC presence will also help early-stage financial technology companies to focus on consumer protections and regulatory compliance from the start.
“There are a number of FinTechs starting to emerge in Perth, and having the ability to talk quickly with ASIC about regulatory requirements and how to build businesses that can operate within the law and be mindful of consumer protections,” Mr Husic said.
“This is important, especially building a business model that will be sustainable and doesn’t have to be pulled apart later because it’s not regulatory compliant,” he said.
“We think it’s good to build solid businesses and to keep them in WA. We want to build WA’s FinTech sector and create an opportunity for it to become a regional hub that’s placed fantastically well for work within the Asian region.”
It’s also important to bolster ASIC’s presence in the wake of the Royal Commission into the banking sector, he said.
“We want FinTechs to provide a competitive alternative to the big banks, but we want them to do it with consumer protection in mind, and this type of investment in extending ASIC’s presence will help do just that.”
“This is practical help where it’s needed most and in a sector where consumer protection is a big part, with increasing focus post the Royal Commission.”
Perth-based Credi founder Tim Dean, who is a FinTech Australia board-member, said the announcement would help local startups reduce unnecessary travel costs.
“Any investment in infrastructure on a localised nature is good news. It will give focus to the FinTech community locally that they have a resource that they can tap into. ASIC is a resource that FinTechs should expect to be involved with,” Mr Dean told InnovationAus.com.
“I spent a whole lot of last year toing and froing from Sydney, and that’s an expense that startups could do well to avoid. Any initiative in that area from a localised nature should be supported.”
Mr Dean said that the reason many Perth FinTechs are locating to Sydney or Melbourne is because of the much larger markets on offer in those cities.
“It’s an inescapable fact that the polarisation of FinTechs in Australia is over to the east, and players in that space have to do that and have to understand that,” he said.
“[The investment] is welcome and needed and great, but we can’t get over the fact that the population density and the opportunity density is skewed over east.”
FinTech Australia is also working to expand its outreach to the west, and will be holding a meeting in April.