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BDO responds to Fintech submissions

27 January 2020

BDO Australia has today responded to submissions to the Select Committee on Financial Technology and Regulatory Technology as part of its review of the industry.

Tim Aman, Leader for Global FinTech and Australian Lead for Financial Services at BDO said: “Last September, the Senate established its Select Committee on Financial Technology and Regulatory Technology. Their remit was to look at the barriers in the sector, current regulatory technology (RegTech) practices and the opportunities to strengthen compliance but also reduce costs. They also are looking for ways to improve the effectiveness of current initiatives in promoting a positive environment for financial technology (FinTech) and RegTech start-ups.”

“The Committee called for submissions and over 100 were received from across the industry – regulators and operators, including APRA, the Reserve Bank of Australia and FinTech Australia (who themselves represented over 300 companies in their submission).

“Regulation of the industry and the desire for a level playing field for all operators stands out as the single biggest response from the industry.

“Some of the most important issues raised were:

  • Access to Capital and Investment – access to capital is crucial to support the continued growth of the FinTech sector in Australia. BDO supports the call for Government to do more to create environments for angel investors to enter the market. This should include establishing a growth centre for the industry to compete on a global level as well as creating the ‘Fintech Bridge’ for Australian and UK companies to establish cross-border operations.
  • R&D Tax Incentives are extremely important for FinTech’s and the Government’s recent changes to this important source of funding should be reassessed and the application process simplified.
  • Open Banking, Use of Data & Consumer Data Right (CDR) - giving consumers greater control of their own data will create an environment that advocates healthy competition in the industry. All operators, big and small, must have access to the same methods of data capture and the Government has a key role in educating consumers on the process works and what controls they have as individuals.
  • Regulation - BDO welcomes any changes that create simplicity in the system, for example the simplification of the regulation of Digital Wallets.  Currently there are three regulators for digital wallets – the Reserve Bank of Australia, ASIC and APRA. The Council of Financial Regulators has recently delivered a paper to Government setting out its recommendations for a new graduated framework for stored value facilities that is simplified. This is the progression that is desperately needed in the sector to allow for innovative growth.

“We eagerly await the response of Select Committee which is due to report back by October this year on their recommendations for the sector.”