Treasurer Scott Morrison has released a formal statement outlining the Government’s vision to reshape Australia’s financial sector as a fintech hub.
Fresh from overseeing the creation of an expert advisory group that is aimed at boosting Australia’s fintech credentials in Asia, Morrison took the opportunity to explain how the Government planned to encourage the development of fintech back home.
“Fintech is not just about digitising money, it’s about monetising data,” the fintech statement reads.
“It’s about how we can create and capture the value‑add from data, previously limited by the technology we had available.
“It is the second‑round value surge that is now starting to flow from an increasingly digitised economy.”
The Government sees fintech as an opportunity to grow the financial industry’s share of the export market.
“While Australia’s financial sector represents a large proportion of our economy, it makes up only a small proportion of our trade,” the Government said.
“Financial services exports only make up around five per cent of Australia’s services exports.
“It is clear that we must further develop these opportunities.
“That is why the Government is working with the fintech sector to help make the exciting new ideas and innovations of creative and clever Australians a reality.”
The Government noted that Australia’s banks, insurers and other financial service providers had been able to hold market share “for decades” and with “little change to their business models”.
“But today these businesses are facing new pressures from innovators providing services that offer a different experience for consumers,” it said.
“Innovators are opening up new opportunities for business and consumers alike — they are unlocking new demand in our economy.”
Disruption was being felt across a wide cross-section of the industry, the Government said.
“Fintech innovators are disrupting the market place for incumbents and reshaping the approach to financial services in areas such as: primary banking accounts, payments, capital markets, investment management and insurance,” it noted.
“New approaches like crowdfunding, peer‑to‑peer lenders, mobile payments, digital currencies such as Bitcoin, and robo‑advisers could benefit consumers by increasing choice and stimulating more competition.”
Bringing a stronger consumer focus to financial services was a major focus of fintech, and big data and analytics had a strong role to play in that space.
“Financial services providers now talk about attributes, or insights into consumers, not just in the tens of thousands but in the hundreds of thousands and millions,” the Government said.
The Government acknowledged that “some of Australia’s largest financial providers have established centres of innovation and are looking to work with fintech innovators to deliver new solutions.”
Many of those centres have representation on the fintech advisory board.
The Government said that growing financial services and fintech in Australia could “help drive growth in related professional services such as legal, accounting, and other broader technologies.”
“It will also help foster innovation in, and the development of, technology skills and capabilities that benefit the broader economy, such as cybersecurity,” it said.
The fintech focus falls under the broader umbrella of the Government’s $1.1 billion National Innovation and Science Agenda (NISA) announced late last year.