An Australian Senate Committee inquiry into fintech has put forth 32 recommendations to promote further competition in the financial sector, with a particular focus on regulatory impediments.
A deep dive into the issues in the fintech and RegTech space, the interim report identifies big challenges in taxation, access to capital, skills, culture and regulation.
The report spotlights regulatory fragmentation as a key area of focus, with multiple agencies having overlapping responsibilities for promoting competition.
"The number of regulators with a role in relation to competition and financial services in Australia mean that it is not straightforward to ensure that competition is operating effectively in this sector," states the report. "The committee understands that the main responsibility for competition lies with the ACCC but that other agencies such as ASIC, APRA and the Treasury have competition as part of their mandates. Witnesses viewed this fragmentation as a risk and saw the need for Australia's financial regulators to collectively provide greater focus on promoting competition in the financial system."
Australian Government reforms on Open Open Banking through the Consumer Data Right act is recognised as one positive step, but further refinement is required if it is to be truly effective.
"Our Inquiry recommends a new national body to deliver the Consumer Data Right. It is too important to be a unit in the Australian Competition and Consumer Commission (ACCC)," says new South Wales senator drew Bragg, who led the inquiry. "It needs focus and accountability and the capacity to run a public information campaign."
He says there is evidence of anti competitive behaviour on behalf of the big banks and evidence that the regulators are not properly organised to drive competition.
On emerging buy now, pay later models, the inquiry opines against regulatory intervention, arguing that Parliament should assume oversight
"The regulatory system should support innovation like buy now pay later products - not seek to push them into a one size fits all model that was designed for something entirely different (a credit card)," says Bragg. "The Hayne royal commission showed there were significant problems in the financial sector. More choice and competition will most likely emerge from the fintech sector which means it needs our support."
