As the Australian Senate Select Committee on Financial Technology and Regulatory Technology continues to process comments in response to their paper, there are a number of themes emerging that align very closely with Starling’s own views. In particular, commenters have observed that regulators themselves may inadvertently be contributing to many of the challenges startups face.
A recent article in the Australian Financial Review referenced one of these submissions to describe several ways in which the regulatory environment was felt to have delayed adoption of technologies which, ironically, might well provide greater safety for consumers than do current approaches. Shifting regulatory positions introduce uncertainty, and bank risk managers lack assurance that regulators will not penalize banks that experiment with new technologies. This discourages trialing of RegTech tools.
In the aftermath of the Hayne Commission, Australian regulators and firms alike face greater scrutiny regarding their practices. Both also have an opportunity to reframe their role in society and to help promote trust across a greatly tarnished industry.
RegTech firms has emerged specifically to engage in these challenges. And many RegTech firms have already demonstrated an ability to produce change for the better, to the benefit of customers and other stakeholders, as well as for the boards and C-suite management of the firms we seek to serve.
But, as we argue in our own submission to the Senate Select Committee, our industry will struggle to deliver on its full potential without collaborative engagement with regulators who actively seek to promote RegTech innovation and who work directly to encourage RegTech trials and adoption among the financial institutions they oversee.
We look forward to continuing to actively engage in this process in the coming months.