Budget 2016: fintechs; MoneyPlace, OzForex hail recognition
The Turnbull government’s maiden budget may have lacked the necessary fireworks for the local innovation sector but fintech start-ups are not complaining.
Melbourne-based peer-to-peer lender MoneyPlace’s founder and CEO Stuart Stoyan is pleased to see the Australian fintech ecosystem singled out in a budget that didn’t dole out many handouts to start-ups.
“It’s an election budget so they had to balance a few things but the fact that fintech got attention is a big win,” he said.
The government overnight unveiled measures designed to boost the fintech industry that Mr Stoyan said is a reflection of the sector’s growing prominence.
“What we have is a number of factors coming together at the right time to create a super tailwind,” he said.
Richard Kimber, chief executive of online currency site OzForex, said the extra focus from the government should help the fintech industry become internationally competitive.
“Innovation is something that should be mandated at a federal level; there has been continued evolution and success in the fintech space with new technologies continuing to pop up,” Mr Kimber said.
The government allocated $200,000 for a marketing campaign, a new measure designed to spruik Australia’s credentials as a developing fintech hub.
While the sum is relatively modest, fintech start-ups are hoping it would be enough for a platform to showcase their wares at a global level.
Mr Stoyan said bringing fresh capital into the system was still critical, not just for the health of the fintech industry but for the broader innovation ecosystem.
The government also tasked the Australian Securities & Investments Commission to create a “regulatory sandbox” to allow start-ups and existing fintech businesses to test their ideas.
The measure is designed to give start-ups the ability to bypass expensive and complex financial regulatory processes and test their ideas with a group of customers in a regulated environment.
ASIC is set to issue the consultation paper in June.
“The sandbox concept will help start-ups fast-track their proof of concepts and ASIC is actually keen to learn from this process as well,” he said.
George Lucas, managing director of investment app Acorns Australia, is pushing for further tweaks to the regulatory set-up.
“The government has recognised the complications of the regulatory environment with the introduction of the sandbox. However, there are large costs in fintech paid to advisers on making sure we meet regulatory requirements,” Mr Lucas said.
“Instead, these should be treated as research and development costs — just like software or technology, we can’t hold off paying lawyers’ bills forever.”