Australia and UK set up FinTech Bridge to deepen collaboration between governments, regulators, and industry bodies
The Australian Treasurer, the Hon Scott Morrison MP, and UK Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, signed an agreement in London on 22 March, 2018 to establish a FinTech bridge.
The UK-Australia FinTech Bridge will deepen collaboration between governments, regulators, and industry bodies in the two countries. It will also support improved access for Australian FinTech firms to the UK market.
The FinTech Bridge includes collaboration between Australian and UK governments to identify emerging FinTech trends and policy issues, enabling better policy positions. Regulatory expertise will be shared between Australia and the UK, through closer cooperation between the Australian Securities and Investments Commission (ASIC), Australian Transaction Reports and Analysis Centre (AUSTRAC) and the UK’s Financial Conduct Authority (FCA).
The regulatory authorities will facilitate the entry of FinTech start-ups into each jurisdiction’s regulatory sandbox and explore opportunities for quicker licence processing for FinTech firms that are already licenced or authorised in the other country.
Joint projects will also be undertaken to identify shared approaches and identify links between Australia and the UK.
Austrade and the UK’s Department for International Trade (DIT) will provide support for FinTech firms looking to expand into the other market. This support includes providing bespoke advice and mentorship to FinTech firms looking to expand into the UK or Australia. They will also provide a ‘one stop shop service’ to enable firms to access legal, regulatory and practical advice about setting up in a new market.
Matchmaking events, meetings and networking opportunities will be facilitated for companies with potential partnership prospects, and introductions to investors will be provided, assisted by specialist teams at Austrade and DIT.
The collaboration also includes promoting engagement between Australian and UK FinTech sector bodies, led by FinTech Australia and the UK’s Innovate Finance, to discuss collaboration opportunities between FinTech businesses.
UK FinTech firms generate £7 billion in revenue annually, employ over 61,000 people and in 2017 raised £1.3 billion of investment. Investment in Australian FinTech in 2016 reached a high of over US$656 million. Australia is also the second largest alternative finance market in the Asia Pacific. Australia’s supportive regulatory settings and high rate of FinTech adoption presents an attractive market for the launch and expansion of FinTech products.
In his speech at the International FinTech Conference, Mr Morrison said, “Thanks to the support of Austrade and the UK’s Department of International Trade, the Bridge will give businesses tailored assistance to navigate the complexities of operating in a foreign market, such as connections for legal, regulatory and practical advice about setting up between the two markets.”
“These agencies will give FinTechs a networking leg-up, while a collaboration between FinTech industry groups will facilitate stronger business-to-business links in the sector. This is a critical aspect needed to foster development in this fast-paced sector.”
He also highlighted existing collaboration, such as agreement signed in March 2017 between the Commonwealth Bank of Australia (CBA)’s London Innovation Lab and Austrade to support Fintech innovation exchange and investment between Australia and the UK.
In February this year, ING and CBA undertook a RegTech pilot in collaboration with FinTech firms and the FCA in London which demonstrated the potential for artificial intelligence and natural language processing in order to simplify the ways businesses meet their regulatory compliance obligations.
ASIC has been collaborating closely with regulators in other jurisdictions to understand developments, and to help entrepreneurs expand their target markets into other jurisdictions.
Previously, ASIC has entered into FinTech referral and information-sharing agreements with many regulatory authorities, including the Financial Markets Authority of New Zealand, Monetary Authority of Singapore, the United Kingdom’s Financial Conduct Authority, Ontario Securities Commission, Hong Kong Securities and Futures Commission, the Japan Financial Services Agency, Malaysia Securities Commission and Abu Dhabi Global Market Financial Services Regulatory Authority. In addition, information-sharing agreements have been entered with the Capital Markets Authority, Kenya and Otoritas Jasa Keuangan (Financial Services Authority of Indonesia), Indonesia.