RegTech tops FinTech for innovation opportunities
The ‘RegTech’ market — technology driven by new government regulation — provides greater opportunity for IT start-ups than FinTech and other digital disruptor markets, according to senior banking figure Don Sharp.
Sharp, the former co-founder of financial advice business Bridges Financial Services and holder of global patents for payments technology software Payment Adviser, said the greatest financial innovations over the past several decades have not come from within the industry.
“They have been imposed from government,” he said. “As such, RegTech has greater currency in our market than most of the FinTech plays we see coming to market,” he said.
Examples of new innovations driven by regulations include the upcoming New Payments Platform from the Reserve Bank of Australia, which is designed to influence real-time payments in the banking sector.
The ATO meanwhile plans to introduce changes to the payment of Australian wages in 2017 through the Single Touch Payroll initiative. This project has the potential to profoundly impact the superannuation sector.
“My advice for FinTech entrepreneurs is to build for known regulatory events, and remain flexible enough to accommodate the inevitable rollercoaster of ongoing regulatory change,” Sharp said.
“I also implore the policymakers to cast their gaze at longer horizons, avoiding the short-term fix mentality that has largely characterised the oversight of the financial services industry.”
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