Businesses have seen the potential in fintech for new ways of creating and sharing value with technologically savvy investors and consumers, and this calls for a "pro-active and forward-looking regulator" to manage changing regulatory demands, said ASIC chairman Greg Medcraft.
Medcraft, speaking at the annual meeting of the Boao Forum for Asia in Sydney yesterday, pointed to a range of technology-themed financial markets issues already in place or envisaged in the near future, such as:
- peer-to-peer lending and marketplace lending,
- robo-financial advice,
- crowd funding,
- payment infrastructures (eg digital currencies and Apple Pay),
- individually tailored insurance - such as QBE's 'Insurance Box', and
- exchanges using the potential of blockchain technology.
Medcraft said one way the Australian Securities and Investment Commission was "striving to be forward looking" in dealing with such developments was through its Innovation Hub, which has five key roles:
- engaging with other fintech initiatives, including physical hubs and co-working spaces that have been established for startup businesses;
- streamlining the approach to facilitating business for new business models (for example, setting common application processes for applying for or varying a licence and for waivers from the law);
- improving access for new types of businesses, with a portal on ASIC's website now offering a one-stop shop for innovative businesses to access information and services directly targeted at them;
- coordinating the approach to applying any reforms that may apply to innovative businesses in the future;
- advising ASIC on engagement with innovative businesses, through the Digital Finance Advisory Committee which meets for the first time early next month.
The work by ASIC seems well-timed, with several peer-to-peer and marketplace lenders expanding business operations through tie-ups with major established financial services players. For example, an alliance between large broker group AFG and online small business lender Prospa was announced yesterday).
Meanwhile, other major financial players continue to look for their own innovation plays, with National Australia Bank the latest to join the club.
NAB is allocating A$50 million to invest in startups "with fresh ideas in mobile banking, payments and data and analytics," taking its lead from Westpac's $50 million Reinventure fund which has backed the likes of P2P lender SocietyOne, bitcoin exchange Coinbase, and online marketplace PromisePay.