Australia and New Zealand formalise fintech agreement
Making it official.
Today, 19 October, the Australian Securities and Investments Commission (ASIC) and New Zealand's Financial Markets Authority (FMA) have re-affirmed their commitment to promote innovation and fintech development across the Tasman.
It's confirmation of the wide-ranging Memorandum of Understanding reached between the countries in 2012 and follows a meeting focused on the need to foster fintech innovation and growth while also protecting consumers and managing risks.
One of the main points that emerged is the formalisation of information-sharing agreements and referral arrangements through which businesses that venture into other markets can get a referral from one regulator to another.
Information-sharing agreements help regulators stay on top of emerging developments elsewhere, while referral arrangements can make it quicker and easier for businesses to start operations overseas without unintentionally breaching the varied regulations around financial services and fintech in different countries.
ASIC already has referral arrangements and information-sharing agreements with Singapore, the UK, Ontario (Canadian province), Hong Kong, Japan, Malaysia and Abu Dhabi, while information-sharing-only agreements are in place with Kenya and Indonesia.
"ASIC and the FMA have a strong relationship in all the areas we regulate. Our mutual commitment to innovation and fintech is no different." said Garth Stanish, FMA director of capital markets. "We'll continue to share information and views on the regulatory issues arising from emerging technology and increasing innovation.
"Across the Tasman we’ll continue to cooperate with the FMA and refer new businesses where they have an appetite to work in both jurisdictions."
Regulators are catching up
The very real need of regulators to balance innovation and consumer protection has been highlighted with the number of new systems, and entire industries, emerging in recent years.
Uber is probably one of the clearer examples, emerging and catching on as a taxi service, without actually being a taxi service. It emerged and spread internationally, while authorities were left trying to find a way to regulate what's essentially just people riding in cars together and a way to protect existing taxi industries as well as drivers and passengers.
By the time it arrived in Australia, it was effectively too big to ban. Instead, it's been subject to a range of varying state-level regulations that have been trickling in over time.
The right balance of innovation and regulation, and the strengthening of international agreements, is especially important in fintech. Many of the core developments, such as blockchain and cryptocurrency are decentralised and international by nature and will require an international approach to regulation.
Having regulators being quicker on the uptake can also give homegrown businesses a competitive advantage. Australia is becoming recognised as a financial innovator, and its big banks are embracing fintech quicker than banks in most other countries.