Grant Thornton's FIntech Centre of Excellence supports the concept of a regulatory sandbox as a fantastic tangible means of supporting the fintech industry.
The Federal government needs to ensure the sandbox reduces the regulatory burden, increases certainty and stimulates innovation - fintech does not need a regime that just amounts to a different layer of complexity.
The federal government is expected to release next week policy changes to support the growth of fintech companies. This will include a "regulatory sandbox" scheme, which will allow fintech startups to test their products while avoiding extensive regulatory licence applications, eating up seed capital before they determine whether an idea has prospects of success. This concept arose from a proposal by the new Fintech Industry body, Fintech Australia and discussions between the Federal Government & Treasury and regulators ASIC, APRA AUSTRAC & RBA. The sandbox will allow start-ups to test systems and products with real users; numbers and transaction sizes would be limited. Participants would provide undertakings to ASIC and comply with various rules on marketing, privacy, anti-money laundering compliance, disclosure, and management of conflicts of interest, but don't require ASIC licences until the company grew to a particular size.