Small business ombudsman will work to find new industry guidelines, despite the lack of complaints
Fintech is popular in Australia, but it often confuses SMEs.
Australian customers are happy with fintech, with fewer than 10 complaints being sent to the small business ombudsman since March 2016.
Despite the high satisfaction rate, the ombudsman has kicked off a new study aimed at learning how to regulate fintech.
The study’s impetus is feedback from small businesses, who say they cannot tell the difference between fintech firms and the products are too confusing.
“With rapid growth in the number of lenders and the variation of fintech products, it becomes more difficult for SMEs to make informed decisions about which products and lenders best suit their circumstances,” said Ombudsman Kate Carnell.
“The survey results will inform fintech lenders how they can help SMEs by improving the transparency of their lending products and by clearly communicating the rates, costs, terms and conditions of their products.”
Small business regulation is doubly important for fintech as it applies both to lenders and borrowers. Fintech companies are mostly small businesses and so too are their borrowers.
The study has been welcomed by the fintech lobby, FinTech Australia.
“This is proving to be a very beneficial and cost-effective source of funding for SMEs. This research will help even more SMEs to invest in their growth and benefit from alternative lending products.”
There are roughly 30 fintech small business lenders in Australia.