Tyro applauds the Federal Government’s “Backing Australian FinTech” series of policies which aim to make Australia the “leading market for FinTech innovation and investment in Asia by 2017”, announced today by Treasurer Scott Morrison.
Some of the new policy initiatives respond to longstanding Tyro recommendations such as RegTech (regulatory approach that enables innovation) and ProcTech (government procurement and service delivery).
The risk for Australia lies with the dominance of the incumbent oligopoly. It is innovation and competition, that comes from new ideas by new players, that will provide the transparency, security and reliability that de-risks our financial system and will build the prosperity of Australians beyond the mining boom into the digital century.
If Australia were to catch up and capitalise on the FinTech opportunity, it would require the reversal of our current thinking models. We need to turn them upside down:
- The regulators would open up the banking space actively enabling new entrants, new models and new technologies that will dramatically de-risk the financial system through a new transparency and culture.
- The civil servants would open up the public procurement process structuring tenders in smaller sizes, and as panels, enabling multiple contractors to provide their accredited services while maintaining innovation and competitive tension.
- The best and brightest Australians or migrant entrepreneurs would launch themselves into the adventure of starting disruptive businesses, dramatically improving outcomes for people, competing with the incumbents, and not selling out their dreams.
When three Australian engineers started Tyro in February 2003, they were obviously naive but well ahead of their time. They believed in the disruptive potential of the internet, they trusted in a better, fair and transparent banking, and they got started.
We did not call it RegTech but at the time the Reserve Bank of Australia, under Governor Ian Macfarlane, created a specialised regulatory regime (SCCI) and gave Tyro a go. And we did not call it ProcTech, but Medicare Australia tendered the rebating through the domestic debit card system (Easyclaim) as a panel. CBA and Tyro signed up to provide the accredited service and today Tyro is market leader processing more than half of these patient claims.
The Turnbull Government has moved the national narrative to innovation and growth and the Treasurer is laying out a road map of enabling legislation and regulation.
It looks as if a long journey is finally gaining momentum. It started in 2003 with the challenger and disruptor Tyro and continued in 2015 with the launch of the Tyro Fintech Hub. For 2017, the Treasurer foresees a thriving Australian Fintech start-up ecosystem. That would be a dream come true. It does take an ecosystem to disrupt banking.
Image: The hatched area represents the additional labour productivity required to achieve long-term average growth in real gross national income per capita. Source: ABS