Australia could soon become the FinTech Hub of Asia by eliminating regulatory red tape that has previously held the nation’s visionary start-up companies back, according to Tyro CEO, Jost Stollmann.
Stollmann said this could be the result of changes announced by the Australian Government, where start-up companies can now test and evolve their business models with customers in a regulatory ‘sandbox,’ without first having to obtain a financial services licence.
He said the development will help encourage some of Australia’s “best and brightest” bankers to leave the comfort of the ‘big four’ banks and venture out on their own with disruptive new ideas.
“Australia’s financial services sector is the largest contributor to the national economy, providing about $140 billion to GDP last year, and employing 450,000 people. The Australian Government’s package of measures will help unleash a new generation of entrepreneurs and investors who want to make everything we do quicker, easier and more productive.
“FinTech investment around the world reached an estimated $30 billion, a jump of about seven-fold in only three years,” he said.
According to Stollmann, Australia needs to make itself FinTech friendly if it wants to set itself up for the next generation of economic growth.
“If it does, Australia could become the FinTech Hub of Asia, servicing a market of more than three billion people, including a rampant Chinese economy.”
Stollmann added that FinTech was disrupting banking so quickly, it was possible that one of Australia’s big four banks may no longer exist in a generation.
“Australia is now creating an eco-system of FinTech start-up companies that are working together to provide a 21st century suite of banking services for customers and businesses,” he said.
“What that means is that the old and slow banks may be replaced by 100 smaller organisations working together. It is possible that within 20 years one of the current big four banks will no longer be with us. The only question is, which one will it be?”
While most banks have not spoken publicly about the challenges posed by FinTechs, Commonwealth Bank CEO, Ian Narev, recently said that his organisation would be ‘toast’ within 10 years if it didn’t innovate.
Narev then refuted the notion that innovation and technology was only the domain of the start-up, describing Commonwealth Bank as the “big dog sleeping on the porch”.
“FinTech is going to revolutionise how consumers and businesses interact in the future. But individual FinTech companies can’t thrive in an analogue world, we need to create a digital ecosystem for new ideas to grow and prosper,” Stollmann added.
