By Giovanni Campi and Sofia Karagianni
The digitalization of finance is accelerating during the COVID-19 outbreak. Even before the pandemic, FinTechs and BigTechs had begun to change market dynamics by offering new forms of money and new means of payment. Central banks are also looking into the future of money and payments, and at the potential issuance of digital currencies.
Read MoreBy Jim Bulling, Felix Charlesworth and Wendy Li
With the prevalence of smartphones in everyday life, momentum has been building for the use of biometrics to replace traditional passwords. To date, the most popular biometric authentication is fingerprint technology, followed by facial recognition technology. Less used types of biometrics also include eye-scanning, heartbeats and voice pattern.
Read MoreBy Jim Bulling and Charles McDonald
On 13 June 2019, the Reserve Bank of Australia (RBA) released its paper into the New Payments Platform’s Functionality and Access (Paper). In it, the RBA expressed disappointment with the slow roll out of New Payments Platform’s (NPP) services and functionality. As a consequence, the RBA will continue to push the major banks to prioritise the roll-out of services to their customers to address functionality gaps as quickly as possible. The Paper also recommends that NPP Australia Ltd (as operator of the platform) should:
Read MoreJim Bulling and Felix Charlesworth
Following on from the Senate Hearings in January 2019, the Economic References Committee (Committee) published its Report on credit and financial services targeted at Australians at risk of financial hardship.
In addressing the current regulation of the buy now pay later (BNPL) industry, the Committee raised its concerns about the ease of accessibility of BNPL services to consumers experiencing financial hardship. Despite BNPL businesses, such as AfterPay and Zip.co stating that they already had algorithms in place to detect whether it was appropriate to provide services to an individual, the Committee stated that “clearly more needs to be done to ensure consumers are protected, and company algorithms alone are not sufficient.”
Read MoreBy Andrew C. Glass, Gregory N. Blase and Daniel S. Cohen
The rise of Big Data and the development of tools to interpret massive data sets to better understand consumer behavior have led to booming demand for consumers’ personal information. Technological advances have also made biometric data, such as fingerprints and facial features, useful security tools for electronic devices. The growing use of Big Data and biometric data has caused some concern among consumers and policymakers. In response, several state legislatures have taken steps to regulate companies’ ability to acquire personal and biometric data.
Read MoreJim Bulling, Felix Charlesworth, Edwin Tan
On 22 January 2018, two of the largest ‘buy now, pay later’ businesses in Australia, Afterpay and Zip.co, appeared at a hearing before the Senate’s Economic References Committee.
During the Senate hearing, both Zip.co and Afterpay presented how their respective business models operate and responded to questions about how the ‘buy now, pay later’ industry should be regulated. As previously mentioned, ‘buy now, pay later’ businesses are not currently classified as ‘credit providers’ under the National Credit Code (Code) and, as such, are not subject to the responsible lending obligations under the Code.
Read MoreBy Dan Cohen and John ReVeal
FinCEN’s new beneficial owner rules take effect May 11, impacting banks and the program managers and similar companies that help banks comply with the Bank Secrecy Act, including FinTech companies that provide AML on-boarding and monitoring services. Under the new rules, banks and other covered financial institutions will be required to identify and verify the identity of the beneficial owners of their legal entity customers. These rules will add to your regulatory burdens, particularly over the next several weeks.
By Cameron Abbott and Sarah Goegan
Technology company IOT Group announced this week that it has signed an Australian first energy and blockchain deal. In the agreement with Hunter Energy, IOT Blockchain will build a blockchain centre at the Redbank coal-fired power station in the Hunter Valley, two hours north of Sydney.
The UK All Party Parliamentary Group (APPG) on FinTech and APPG on Alternative Lending will be hosting an invite-only roundtable on Open Banking, taking place on 31 January from 9:00-10.30am at the Houses of Parliament.
Open Banking went live in the UK on 13 January. From this date, the high street banks were required to make their customers’ bank transaction data available to third party businesses when instructed to do so by the customer. This is the first major milestone in a multi-year programme to open all payment products to the market for financial services. Over time, it is expected to revolutionise the way consumers and small businesses use and access financial services.
Open Banking was the main remedy mandated by the UK Competition and Markets Authority (CMA) following its investigation into the supply of personal current accounts and banking services in 2016. The CMA concluded that UK banks do not compete hard enough for customers’ business; and that technology should be employed to enable customers to compare and access better deals from new providers.
The Roundtable will be an opportunity to hear the latest from the Trustee of Open Banking, Imran Gulamhuseinwala, two weeks after the new services went live; and to raise any concerns about the potential for consumer detriment. You can register your interest here.
By Jim Bulling and Michelle Chasser
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.
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.
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