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Australia and UK set up FinTech Bridge to deepen collaboration between governments

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