As one year has drawn to a close it is time to look forward to 2018 and our tips for the most important 5 regulatory changes for the FinTech industry in Australia.

1. Increased access to bank data.

The Government has announced its intention to introduce an open banking regime in Australia under which customers will have the ability to give third parties such as FinTechs access to the customer’s banking data. Treasury is currently conducting a review into open banking models, with the report which was due at the end 2017 yet to be released.

Also planned to come in to effect by 1 July 2018 is mandatory comprehensive credit reporting which will give lenders access to deeper and richer sets of data on consumers to base their credit decisions on. Comprehensive credit reporting is currently voluntary.

2. ICOs – consumer protection

In September ASIC issued its information sheet on how existing financial services laws may apply to businesses considering raising funds through initial coin offerings. Given the sheer volume of ICOs we may see ASIC take some enforcement action against issuers where they are concerned about consumer protection issues.

3. Sandbox expansion

The Government has announced an enhanced regulatory sandbox with a wider range of financial and credit products and longer timeframes than ASIC’s current sandbox. Consultation on the draft legislation concluded in December and will likely be considered by parliament in the new year.

4. Crowd-sourced funding

2018 will see the first Crowd-sourced funding (CSF) intermediary licences issued and CSF platforms taking their first applications to raise funds for public companies. Those companies not wishing to become a public company to raise funds may not have to wait much longer to use CSF with new legislation currently before parliament to extend the CSF framework to eligible proprietary companies.

5. Banking licences

Australian prudential regulator APRA is planning to bring in phased licensing for new banks to lower the regulatory barrier for startups. Phased licensing will allow new banks to operate with limited prudential requirements while they build resources, capabilities and capital. APRA is expected to issue updated licensing guidelines for banks including phased licensing in the 2nd quarter of 2018.