Any applause for a renovated law on use of the label "bank" in Australia may be misplaced. While Treasury officials expect that the draft reforms unveiled by Treasurer Scott Morrison yesterday will "result in a reduction of barriers to new entrants to the banking sector", the reality is more likely that they won't. Not one jot.Fintech blowhards may try to take a little heart from the Treasury Laws Amendment (2017 Measures No. 8) Bill 2017 released in exposure draft yesterday. Its purpose: amending section 66 of Banking Act.None can weave this minor law reform into a business case. Australian regulators cannot be said to be putting out a welcome mat for new entrants, especially in the fintech sphere.The problem is that none of the reform measures address the regulatory pedantry at APRA most relevant to encouraging the entrance of new banks, whether thinly capitalised or well-capitalised.For the Australian Prudential Regulation Authority, the most compelling factors in weighing up a licence for a new banking hopeful are not whether the entity kicks off with more or less than A$50 million in capital but rather the capacity of any outfit to credibly engage in the business of banking. This is no desk exercise to support the theatre of a future funding round.As APRA's website make clear to the fintech fanatics, "where an applicant does not have an existing operation in Australia, it is expected to build its resources and establish its core operations during the authorisation process, so that it is ready to commence business when it is granted authorisation."Most of all banking hopefuls must convince APRA that, in any stressed situation, they have plausible plans in place to drum up a whole lot more capital and maintain the finesse to keep rounding up wholesale and other deposits. A renowned list of mates on LinkedIn or Twitter with boutique breweries to mortgage just won't cut it. Axa, for example, helped the industry superannuation funds get their banking brainchild, now trading as ME, over the line in the late 1990s. Tyro Payments confined their start up banking business in the late 2000s to one that omitted deposit taking as a core product for most of its first ten years.There's a deep-seated cynicism and even, maybe, an entrenched work practice at APRA that makes it tougher than tough to meet all prudential standards relevant to making the leap from app and website to a genuine, challenger, deposit taking enterprise.Since the GFC fewer than ten foreign banks have managed to pass all APRA tests to earn a credential to operate in Australia as a foreign bank branch, in some cases receiving the precious authority years after they began telling counterparts they'd be opening for business.