The Lord Mayor of London says there are wonderful opportunities for Australian fintech companies still looking to expand into the United Kingdom.
Lord Mayor Peter Estlin was speaking to residents at Sydney’s fintech hub, Stone & Chalk, during his tour of Australia to promote the successful UK-Australia FinTech Bridge; a support program for fintechs in both countries.
The FinTech Bridge involves co-operation between the UK and Australia and provides support for companies looking to expand to either country.
Estlin said that he wanted to encourage more Aussie fintechs to join the 70,000-strong fintech community in the UK with its opportunities for new customer markets and investment.
“In terms of the capital coming into the UK – five and a half billion pounds has gone into fintech in the first 7-months of this year alone,” he said.
The UK is considered a world leader in fintech and generates more than $7 billion annually.
Estlin said Australia was also an attractive marketplace for UK companies due to “our cultural similarities” and our proximity to the Asian markets.
“A marketplace here is likely to be a major plank in the whole Asia-Pacific agenda – whether it’s the Asia market specifically, or whether it’s bilaterals with China and Japan.
“Having strategic partners internationally is crucial. Brexit will be a blip when we look at the whole long-term agenda of the digitisation of our industries and the environment,” he said.
The Lord Mayor said his tour had shown him that there was still “work to do” with Australian regulator ASIC, and its UK equivalent, if fintechs are to continue to benefit from the program.
Since its establishment 18 months ago, an impressive 28 Australian companies have expanded to the UK, while 16 UK companies are now utilising Australian markets.
“In one sense that’s quite good,” he said. “But we have 1600 fintechs at last count – so there should be many more,” he said.
During the meeting in Sydney several fintech founders claimed they were having tax and insurance problems in the UK and the Lord Mayor admitted he’d heard that opening foreign bank accounts was the “bane” of much suffering.
“I think we have a bit of work to do on our regulators and that’s one of the takeaways in terms of getting ASIC and the FCA (Financial Conduct Authority UK) to really get down to brass tacks on a number of issues,” he said.
“We’ve got to get the banks and the regulators together and say, ‘this isn’t working.’ The important thing is to discuss these issues and keep an open mind,” said Estlin.
He agreed there were common links between Australia’s Open Banking legislation and the UK legislation, which rolled out first.
However, one founder told Estlin that the influence of big banks on the Australian Consumer Banking Legislation had led to restrictions on data sharing and that threatened to disadvantage around 70 smaller banks and 700 fintechs.
“It sounds as though you are saying that you need policy change here in Australia that would create more of a catalyst (for business,)” he said. “One of the reasons I met with Treasury and Senator (Jane) Hume (Assistant Minister for Superannuation and Financial Services) was to convince them that politically ,there is a lot more upside to this, than there is downside,” he said.
The UK and Australia have committed to negotiating a free-trade agreement to better facilitate the digital economy and innovation, once the UK has withdrawn from the European Union.