Industry leaders and the fintech news cycles of both countries welcome the calls for "closer and stronger collaboration" in the UK-Australia Fintech Bridge agreement.
But what does this actually mean, and how does it translate to policy?
We have read the agreement so that you don't have to. Here are at four important details to note:
1. Preferential treatment for Aus, UK companies in each other's 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 business 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.
2. Open banking complementarity
The two countries will ‘investigate options’ for developing complementarity. Both Australia and the United Kingdom have recently set the wheels in motion for 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 also fundamental given the strength of financial links between the two countries.
3. Annual fintech competition
The Department of Investment and Trade has agreed to support an annual fintech competitions where Australian fintech firms can compete to win a personalised trip to the UK to promote business links and expansion opportunities with invitations to European fintech events, membership discount to fintech institutions and series of meetings with UK investors, buyers and suppliers.
4. This agreement is far stronger than any other before
Previous fintech agreements that Australia and the UK had 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 co-operation 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.
Glenn Hodgeman is the founder of AltFi's Australasia Summit 2018.
