Federal Budget 2017: a commentary on Australian fintech
Friday, 12 May 2017
Spotcap Australia and New Zealand Managing Director, Lachlan Heussler
Open Data and APIs
Treasurer Scott Morrison announced a budget on Tuesday night with a number of fintech-friendly features. Key for Spotcap Australia was the announcement of open financial data reforms. Intended to increase competition in the banking sector, Spotcap has long agreed on the importance of mandating open data for multiple reasons.
By giving customers and businesses access to their own data, it enables that person or business to control their information, shop around for the best deal, and ultimately equip them with the knowledge they need to make the best financial decision for their situation. Crucially for Spotcap, this also means our clients will be able to authorise us to access their data. This which will ensure faster, more secure processes on our end, in turn improving the customer experience we give Australian SMEs.
The Productivity Commission had also suggested banks build APIs to facilitate data sharing with customers; we believe this was the first step in the right direction, and affirmed in last night’s budget announcement. For us to mimic the UK model – where UK banks have been told to allow for API-based sharing of data for individual and small business customers by 2018 – these announcements are bringing Australia into line with what’s expected of a modern, global financial services ecosystem.
The budget also introduced the lowering of the regulatory requirements for businesses to act as and call themselves banks. This means that the big five banks will face an increase in competition from smaller bank offerings. For fintech, we’ll see customers search for finance solutions expand and businesses will begin to explore other alternative lending possibilities. As a result, we’ll see a rise in businesses looking at alternative finance and what they can do for their business, as opposed to traditional lending channels such as banks.
All in all, in our view this federal budget proves to be sensible, and focuses on the main issues in the Australian economy. Through the various measures designed to boost and empower SMEs, we think the budget will result in increased small business growth and allows firms like Spotcap to better service the needs of this fundamentally important sector of the Australian economy.
The SME landscape is ever-changing, and will see even more changes set upon it in the years to come as an increasing focus on tech, innovation and skills is set to drive the Australian economy. We welcome the latest changes, and look forward in anticipation to see the continued growth of Australian fintech.
Until next time,
Managing Director of Spotcap Australia and New Zealand.