Tyro, which is now a member of the Fintech expert advisory group formed to help make Australia the leader in financial technology in the Asia Pacific region, added its disruptive voice to the kick-off round table discussion today.
The group was announced by Prime Minister Malcolm Turnbull (pictured) and Treasurer Scott Morrison in Canberra. Tyro was adamant that a new approach to regulation was key.
Turn the regulatory thinking upside down
Conventional thinking is about trading off the enforcement of regulatory rules that APRA, ASIC and AUSTRAC enforce while tolerating more risk to allow experimentation and innovation. That is, in the new digital world, an error in thinking.
The public interest is better served and Australians are better protected, if regulatory outcomes were ensured by proactively embracing experimentation and innovation.
The risks in the financial system can actually be reduced by enabling and supporting new entrants, new business models and new technology. To enable those, the regulator would:
- Implement the Regulatory Sandbox where new solutions can be experimented within a limited risk space. ASIC could use approved partners as appointed representatives/responsible managers for fintech start-ups.
- Differentiate the regulatory categories so that new solutions are being accommodated under regimes that are more tailored to the specific risks that those inject into the system.
- Leverage online reporting, APIs, big data, methods and algorithms to build systems that enable regulatory and supervisory bodies to deliver their mandates.
Imagine the formidable advantage for Australia’s financial services industry in terms of stability, transparency, efficiency and trust. Australia’s fintech industry would have a huge leg-up on the global stage. Australia’s consumers and business community would benefit from innovative and competitive fintech solutions.
In the Prime Minister’s words: “Fintech is at the cutting edge of innovation and will help to deliver more efficient financial markets and more customer-focused outcomes for consumers.”