The government has moved to build a “FinTech bridge” to the UK to better enable cooperation between industry and regulators and assist local companies in expanding overseas.
Announced by Treasurer Scott Morrison on Thursday morning, the Australia-UK FinTech Bridge will go beyond existing FinTech agreements between ASIC and other regulators in countries like Singapore, Japan and Canada.
“The FinTech bridge will enable close collaboration between governments, regulators and industry to identify emerging trends, share policy developments and better position firms for the challenges of entering a foreign market,” Mr Morrison told the Collab/Collide FinTech conference in Melbourne.
“The bridge will give our FinTech firms an avenue to pursue international expansion or partnerships with innovative companies in the UK.”
The agreement between the two countries will enable “enhanced collaborations” on blockchain, data, RegTech, WealthTech and “hopefully much more”, Mr Morrison said.
“We want governments, policy-makers and regulators to have greater access to each other and to work together going forward to streamline rules and processes for FinTechs looking to grow in reciprocal jurisdictions,” he said.
“A collaborative approach on innovation speeds up the ability of our Australian FinTechs to reach for global coverage and enhances the product that can be offered.”
Mr Morrison said government was still finalising details of the bridge, and expects to do an electronic signing by the end of the year.
He said the concept is “directly lifted” from the UK’s existing FinTech bridge policy.
“If someone has a good idea, then we should follow suit, and we’ve been doing that. This gives us a real seat at the table in guiding international norms and regulatory treatment of FinTech,” Mr Morrison said.
The UK has established FinTech bridge with Singapore, South Korea, China and Belgium. The agreements enable either regulators to refer FinTechs to their counterparts, and sets out how they plan to share and use information on FinTech in their markets.
ASIC already has an agreement with its UK counterpart to refer each other to innovative businesses seeking to enter the other’s market, with the regulator then providing support and advice in complying with different regulations.
The FinTech bridge was developed in partnership with FinTech Australia, and will work in conjunction with Australia’s Trade FinTech advisor, who was recently appointed by AusTrade.
At the conference, Mr Morrison also confirmed that industry-led New Payments Platform will be launched in February next year.
“Businesses and customers will have the ability to make payments in real time, with funds available to the recipients at the click of a finger, 24 hours, seven days a week,” he said.
“Importantly, the New Payments Platform will support a range of real-time overlay payments services, which allow FinTechs to leverage the technology with their own products.
“The infrastructure will shortly be here, and I cannot emphasise enough the opportunity for you guys to build businesses on top of this. This moves the goalposts and creates a new realm of opportunity,” he said.
The first such overlay will be BPay’s Osko payments, which will allow transfers without a BSB or account number, using emails or phone numbers instead.
FinTech has been a core focus for the Turnbull government over the last two years, and has remained a focus despite the broader drop in interest in innovation policy.
Mr Morrison said the government was focusing on FinTech because of the jobs and economic growth it will create.
“I can see how the success of FinTech in Australia can transform our economy by realising the gear shift in productivity that is critical to securing more and better paid jobs for Australians in the future. This is the real prize,” he said.
“What they are trying to achieve is tantamount to a revolution in the financial sector, one that will benefit us all.
“I believe we are yet to feel the full force of change coming from an expanding FinTech sector that is sure to be a new driver of productivity. This is a real impact that benefits a nation and why I am behind FinTech all the way.”