Australian fintechs have called on the Government and regulatory bodies to bring in new laws to crack down on incumbent banks, who are accused of engaging in anti-competitive practices to inhibit competition in financial services provision.
The Select Committee of Financial and Regulatory Technology, established in September, is undertaking a review of Australia’s innovation sectors, for which it has received 123 submissions.
Among them were multiple submissions from fintechs accusing incumbents of anti-competitive behaviour, which is stifling competition.
Investment app, Raiz, for example, has pointed to the “regulatory environment and government that favours incumbents”.
Raiz has previously accused the Commonwealth Bank of Australia (CBA) of blocking customers from using its service, warning them that using the app increased the risk of fraud on their accounts. CBA has denied this.
Fintech Australia, the industry body which represents neobanks Volt and 86 400, amongst others, submitted its concerns that its members were receiving letters from banks warning them against screen scraping, the process of gathering data on customers by translating screen display data from one application to another.
86 400 has called on the government to address its reliance on the banking industry to self-regulate, which enables incumbents to delay implementation of regulation designed to increase competition.
CEO of 86 400, Robert Bell described this approach as “at best slow, and at worst ineffective”.
“The delay of implementation of regulatory change (which in some instances has been years) can have serious impacts on fintechs that have developed innovative services reliant on that implementation,” he added.
“A long delay may well prove fatal to a startup.”
The select committee’s final report on its findings will be presented before the start of October.