Government should enable, not hamper fintech growth

03 Aug 2015

Government had a powerful role to play in the establishment of Australia’s fintech sector, Stone & Chalk chief executive Alex Scandurra said at the Boao Forum for Asia in Sydney on Friday.

Although some “purists” would prefer to keep government out of the space and foster growth through an entrepreneurial community and ecosystem, government involvement would prove a powerful ally, as had been demonstrated in Silicon Valley and most recently London, Scandurra said.

“I think the best role for government to play is to remove the barriers and create the right conditions to allow innovation and entrepreneurship to succeed and thrive,” he said.

That would not mean removing consumer protections or adding any risk, but should include measures such as regulators being enablers of change as opposed to policing against change, he said.

“Likewise the regulators at all levels of government [had to] recognise the need to embrace new models,” he said.

“The reality is that regulation and laws aren’t stopping how consumers behave.

“Regulation being a barrier to entry no longer really applies in the digital world.”

In particular, the government could assist fintech start-ups from a tax perspective through better addressing their specific needs and how they differed from larger organisations, he said.

Further, incentivising early-stage investments, as the Seed Enterprise Investment Scheme had achieved in the United Kingdom, would help mobilise capital to the fintech sector, he said.

“[Another area to be addressed was] the introduction of entrepreneurial visas tailored towards tech start-ups,” he said.

“This would see [fintech] organisations have a different set of conditions that make it easier for them to attract that best talent in the world that they need to scale their business, as opposed to the more industrialised 457 visas for large organisations.”

The government should also focus on implementing STEM (science, technology, engineering and mathematics) and design programs in primary schools to create the skills and the pipelines to support fintech start-ups, he added.

“And that again emphasises the fact and importance of those entrepreneurial visas because that’s going to be a 10 to 20-year gap [before a domestic talent pool matures],” he said.

“There’s an enormous amount of enablers that are fairly low cost to the Commonwealth to implement, which would make a massive difference [to fintech].

“But it’s the combination of those two we need to really address.”

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