As a leading professional services firm, KPMG Australia (KPMG) is committed to meeting the requirements of all our stakeholders – not only the organisations we audit and advise, but also employees, Governments, regulators and the wider community. We strive to contribute to the debate that is shaping the financial services industry and welcome the opportunity to provide a submission to the Second Issues Paper (Issues Paper) released by the Senate Select Committee on Financial Technology (FinTech) and Regulatory Technology’s (RegTech) (the Committee).
KPMG welcomed the establishment of the Committee given that developments in FinTech and RegTech are at the forefront of the digital revolution that is changing how businesses, consumers and government bodies operate around the world. KPMG is pleased to respond to the Issues Paper that turns its attention to investigating some of the longer-term issues that drive future jobs and economic growth and ensure Australia remains globally competitive.
KPMG provided a response to the Committee’s initial request for submissions in December 2019 and we welcomed the Committee’s Interim Report and its 32 recommendations. Particularly we strongly welcome the recommendations that note the need for further clarification around eligibility for tax incentives to ensure genuine software and technology creation by Australian start-ups, the establishment of a new national body to deliver the landmark Consumer Data Right (CDR), creating a stronger competition mandate to promote innovation and guard against anti- competitive behaviour, supporting innovation like Buy Now Pay Later products and establishing a framework to regularly assess Australia’s global competitive position.
KPMG is also pleased to see several important FinTech/RegTech initiatives funded in the 2020-21 Federal Budget, following the Interim Report’s finalisation, including $11.4 million over four years for the RegTech Commercialisation Initiative, $9.6 million over four years to help FinTechs expand into international markets and $6.9 million over two years for industry led blockchain pilots to reduce regulatory compliance costs.
KPMG’s previous submission to the Committee provided an 11-Point Action Plan to support the continued growth of a vibrant FinTech and RegTech industry which is again outlined at Section 1 of this submission. However, at the time of writing the 11-Point Action Plan, COVID-19 had not yet begun to shift the world in ways that we could have not predicted. COVID-19 has disrupted supply chains and will have a long lasting impact on how we work and do business. Geopolitical tensions are making it harder for the FinTech/RegTech industry to trade across borders and access to capital is becoming increasingly constrained.
This submission is structured in a way that seeks to respond to the themes outlined in the Issues Paper and Section 2 covers the following topics:
- Competitiveness of Australia's corporate tax settings
- Research & Development agenda for growth
- Regulation – Consumer Data Right
- Data standards and blockchain
- Data Security
- National interest considerations
- Talent acquisition/retention