Government fintech sandbox "great news"
The industry has backed the government's move to introduce a regulatory sandbox which will allow fintechs to test new products and services for 24 months without the need of an ASIC licence.
The sandbox is slated to be live in September.
The enhanced regulatory sandbox will provide a further boost to Australia’s rapidly maturing fintech ecosystem, reducing barriers to entry and promoting competition according to a statement released by Minister for Financial Technology Jane Hume.
Australian consumers will benefit from greater choice in financial services, with technology-driven offerings that are convenient, tailored and cost effective the statement continued.
The regulatory sandbox launched by ASIC in 2016, expanded the scope of what can be tested and how long businesses can test earlier this February.
General manager at FinTech Australia, Rebecca Schot-Guppy welcomed the finalisation of the regulations stating change has long been need in the industry.
“This is great news for the Australian fintech ecosystem.
“We’ve long been discussing the need for change to the regulatory sandbox, so it’s heartening to see all of our recommendations accepted and actioned.
“The expanded sandbox will allow for new innovative companies to actually test their ideas, and deliver new customer-focused products.
“We believe these changes will also encourage the use of the sandbox, which has been underutilised to date.”
The sandbox will broaden the range of financial services available for market testing, including services which advise on or distribute non-cash payment products, insurance, superannuation, simple managed investment schemes and listed securities.
Consumer credit contracts between $2,000 and $25,000 will also benefit from the sandbox enhancements.
Consumer protections will remain with firms required to demonstrate that their proposed service is genuinely innovative and is likely to result in net consumer benefit.
The finalistation of the regulations will caps aps on aggregate and individual exposures and product limits apply.
Firms will be required to have adequate professional indemnity insurance and be a member of the Australian Financial Complaints Authority (AFCA).