London Bridge to Sydney Harbour: What to expect from the Aussie-UK ‘FinTech bridge’

Industry leaders and the fintech news cycles of both countries welcome the calls for ‘closer and stronger collaboration’. But what does this actually mean and how does it translate to policy? We’ve read the agreement so that you don’t have to. Here are at four important details to note.

Preferential treatment for Australian and UK companies in each other sandboxes

Australia and the UK have committed to easing the entry of start-ups from the opposing country into their respective sandboxes. This is likely to come in the following forms:

Building on the previously agreed ‘Referral Mechanism’ and easing entry of fintechs into sandboxes
Quicker processing time for already licensed companies in the other jurisdiction
Provision of a ‘One stop shop service’ that will allow firms to access legal, regulatory and practical help in setting up between the two markets
Setting up a fintech network and partnering system to increase cross-national business partnerships.

Cross-national businesses are already popular with fintechs like Ratesetter,ThinCats, OTCX, Floatapp, Transferwise and many others with a hand in both markets. This commitment is likely to lead to more companies expanding into the other sandbox. A Fintech Australia reportindicate that the UK is the most popular market for potential expansion.

Open Banking complementarity

The two countries will ‘investigate options’ for developing complementarity. Both Australiaand the United Kingdomhave recently set the wheels in motion for their own Open Banking regimes. Open Banking legislation came into force in the UK in January, whereas recommendations are currently being made in Canberra. Early bilateral complementarity is important as it gives both nations an international first-mover advantage in a very new sector. Domestically, it is also fundamental given the strength of financial links between the two countries.

Annual fintech competition

The UK Department of International Trade has agreed to support an annual fintech competition where Australian fintech firms can compete to win a personalised trip to the UK to promote business links and expansion opportunities. They will also receive invitations to European fintech events, membership discounts to fintech institutions and a series of meetings with UK investors, buyers and suppliers.

This agreement is far stronger than any other before

Previous fintech agreements that Australia and the UK have signed with other major markets like China, Hong Kong, Japan and Singapore, including the previous 2016 Australian-UK agreement, are all very similar in nature.

Often the same recycled agreement template is used with some modification, each promising to share information (where appropriate), issues of confidentiality and the establishment of a referral mechanism.

This new fintech bridge is far stronger, expanding cooperation into more specific action. While previous agreements only directed the main financial regulatory bodies, this agreement is far more encompassing with a wide range of bodies from government to regulators to business leaders.

Australia

United Kingdom

Action agreed to

Australian Trade and Investment Commission (Austrade)

Department of International Trade (DIT)

Appoint fintech specialist to offer cross national industry assistance and advice
Establish links between fintech departments
Matchmake Australia-UK fintech firms for networking opportunities
Establish joint Working Group

Australian Securities and Investments Commision (ASIC)

Financial Conduct Authority

(FCA)