The Australian, Richard Gluyas, 20 October 2015
The emerging fintech sector has no shortage of ideas and energy, and celebrated Gangnam Style when Malcolm Turnbull recently elevated himself to patron saint of innovation.
While some policy finetuning at the federal level is still to come, it’s becoming clear fintechs have to sharpen up their own acts, at least in terms of their awareness of the requirements of the regulatory and licensing system.
On this issue, ASIC’s engagement with the sector has been first-class. Last Thursday night, commissioner John Price and senior executive leader, strategic intelligence, Mark Adams, spent a few hours at a Melbourne fintech meet-up hosted by KPMG.
While Price didn’t put it so bluntly, one of his key messages was that there are mutual obligations. The watchdog will continue to engage and do as much as it can to help fintech start-ups navigate some complex regulatory hoops, but, just like the start-ups, it has limited resources.
It also has an overriding mandate to promote trust and confidence in the financial system and its users, which means no compromise on core principles even if there’s the power to grant waivers at the margin.
At ASIC’s highest levels, there’s a recognition that fintech companies — to varying degrees — are disrupters, often with little or no exposure to the regulatory system, and are trying to leverage new business models.
However, if they’re after a quick turnaround from ASIC, they should come well prepared.
Slide packs should include an easily digestible explanation of their business models, some idea of why their models are innovative, and a convincing story about how it will benefit consumers and investors. They should also be able to broadly identify the regulatory issues that confront them.
If they’re at all unsure about these issues, the companies should consult with ASIC.
Price provided a breakdown of the 43 fintech companies ASIC has informally assisted.
The most popular segment was roboadvice (19), followed by payments (6), marketplace lending (6), crowd funding (5), markets (2) and other (5).
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