The Australian Securities and Investments Commission is continuing with its plan to open new avenues for fintech startups to expand, last week signing a cooperation agreement with the Malaysian Securities Commission ‘SC’, following similar agreements with Japan and Hong Kong in recent months.
Investment in fintech in Australia has been growing exponentially over the past few years, with total investment in 2016 reaching $8.6 billion, up from $0.5 billion in 2013.
Government bodies have also pinpointed the fintech sector as a key opportunity for growth, with the Victorian Government announcing a future fintech hub and festival to position Melbourne as a key part of the ecosystem.
Australia has also ranked fifth in the world for fintech adoption, with one in three digital consumers using fintech technologies, according to a recent report by Ernst & Young.
The Malaysia agreement provides a framework for information sharing between the country’s two regulators, enabling ASIC to keep updated on regulatory and economic developments in Malaysia that can inform Australia’s own regulatory approach.
ASIC Chairman Greg Medcraft heralded the agreement as a key step in cementing Australia’s position as a fintech leader.
‘International cooperation on fintech is essential. This agreement will help local businesses grow beyond our borders, and improve our understanding of fintech in the region,’ Medcraft said in a statement.
On Thursday leaders in the fintech community told StartupSmart that although Australia punches above its weight when it comes to capturing fintech consumers, more can be done to strengthen the Australian system.
Fintech founders say engagement with the global market is key to moving the sector into the next stage.
Colin Weir, founder of Sydney-based banking app creator Moroku says he is glad ASIC is “actively shifting the needle” by lowering barriers to entry for startups and “inviting us in to those kind of environments”.
“The truth is that [Asia] is the engine room of the global economy,” he says.
Weir believes that ASIC needs to set concrete goals to help the fintech ecosystem, which means deep-diving into the industry landscape and noting where competition is lacking and where there is a potential for innovation.
“No one wants startups – what we want is strong healthy robust businesses in the marketplace,” he says.
To that end, he notes that enabling startups “access to the regulatory sandbox” in the broader regional market “can only be good”.
The agreement also allows ASIC and Malaysia’s SC to refer innovative fintech businesses to each other for advice and support, offering assistance to businesses around understanding the regulatory landscape in each of their jurisdictions. This means Australian fintech startups wishing to operate in Malaysia will now have a simple pathway for engaging with the SC, and vise versa.
Sid Sahgal, chief executive of an online brokerage startup Macrovue, believes this cooperation agreement marks a “good tangible step” from ASIC in supporting the fintech startup ecosystem.
“Having a single point of contact to get information regarding expanding overseas will help startups avoid expensive legal and consulting costs to understand the legal requirements in different jurisdictions,” he says.
Mark Estall co-founded of ASX-listed cloud startup 9 Spoke, and says his business works closely with financial institutions around the globe. His experience working in Singapore and Hong Kong gave him an insight into the opportunities within the well-developed fintech markets in these regions.
“They seem to be really willing and able to innovate,” he says.
9 Spoke’s first dealings with Singaporean financial institutions were “really fast from the get go” and saw them host an in-depth three day workshop of their dashboard technology within 10 days of their first meeting.
“That’s a pretty bold move,” Estall says.
To date, Australia has entered fintech referral and information-sharing agreements with the Monetary Authority of Singapore, the United Kingdom’s Financial Conduct Authority, Ontario Securities Commission, Hong Kong Securities and Futures Commission and the Japan Financial Services Agency, as well as a deal with Indonesia’s regulator.
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Angela is a journalist and content marketer from Melbourne. She primarily covers Australian small business and HR news.
