Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia
It would seem Australia’s hopes of having a quickly implemented open banking regime are fading fast, if not completely transparent already. An already delayed start date of February 2020 has been pushed out to July 2020, causing much consternation in the startup community, as fintechs continue to battle with unpredictability around the regime.
On top of this, fintech advocacy groups have highlighted the significant costs that fintechs will face to become accredited to use the system, making testing product-market fit near impossible, without significant upfront funding. As most founders will know, this is hugely problematic – most investors want some of the chicken and at least the egg before they’ll part with their dimes.
To add insult to injury for fintechs downunder, consumer groups are pushing for screen scraping technologies to be banned once open banking is in play, arguing that legacy fintechs must migrate to the higher standards of the open banking regime.
In principle, I’m sure many fintechs, even those on ‘legacy’ screen scraping technology, would migrate in a heartbeat – if it were commercially viable and simple to do so. But the fact of the matter is it isn’t. Firstly, it’s not even available, and secondly, what should be a simple and open set of standards, is mired in controversy and debate amongst stakeholders.
What seems to be lost in this debate is that for decades banks have sat on legacy data that has seen them pass on billions of dollars in unnecessary costs to consumers. If the nation is serious about actually challenging the stranglehold banks have on consumers, and the free-for-all of fee taking that currently exists, they would be bending over backwards to create an environment that allows fintechs to flourish.
Australia needs to invest in this infrastructure and invest fast. We need to stop talking about it and just do it. Internationally, it is somewhat embarrassing that we cannot even get this done. The UK is already years ahead of us. Developing nations, on our doorstep, are likewise leapfrogging us.
Stagnation and uncertainty are the enemy of progress, and fintech seems to be caught right in the thick of it. Investors and founders be warned.
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